Tax Receipts (Hansard, 6 November 1975)

§ 5. Mr. Teddy Taylor
asked the Chancellor of the Exchequer what is the total of tax receipts in the most recent 12-month period for which figures are available expressed as a sum per head of population; and what were the comparable figures two, five and 10 years previously.

§ Mr. Robert Sheldon
In the 12 months ending June 1975, total tax receipts on the basis used in the national accounts were equivalent to £493 per head of population. The corresponding figures for earlier years were: year ending June 1965, £163; June 1970, £214; June 1973, £333. Total tax receipts comprise taxes on income, expenditure and capital; taxes on expenditure include local authority rates.

§ Mr. Taylor
It is truly frightening to see how the tax per head of population has soared. Is not one of the major factors which are crippling industry and enterprise in this country, and thereby creating more unemployment, the intolerable load of direct taxation? Will the Minister, therefore, bear in mind the desperate need to reduce taxation as a means of ensuring the revival of economic and employment prospects.

§ Mr. Sheldon
No one can profess to be happy at the high levels of taxation as they apply to the general population. I remind the hon. Gentleman that a large element in this increase is a direct result of inflation. If direct taxes were to be reduced in the way the hon. Gentleman suggests, the result would be higher, not lower levels of inflation.

§ Mr. Bidwell
Does my hon. Friend recall that when the Prime Minister was Leader of the Opposition he once described the tax avoidance industry as being the most thriving industry in the country? Was that the case under the previous Conservative Government, and under this Government is it subsiding?

§ Mr. Sheldon
No one can escape the fact that the tax avoidance industry was a flourishing one. We have made its task somewhat harder by the actions that we have taken over the past 18 months.

§ Sir G. Howe
Will the Minister acknowledge that because of its size the 589 tax burden is now predominantly and inequitably borne by the ordinary working population of this country? Does he accept that if all tax rates with yields above 50 per cent. were abolished only about 4 per cent. of the £14 billion yield of income tax would be lost? Further, does he accept that under this Government we shall have to face marginal rates in excess of 40 per cent. of tax, including national insurance contributions? Is that not another overwhelming reason for the Government to get a tighter grip on public spending?

§ Mr. Sheldon
Although I cannot accept the figures advanced by the right hon. Gentleman without a closer examination of them, it is true that the average level of burden on ordinary men and women earning incomes in this country has increased. However, that burden cannot be reduced without there being a higher level of inflation of a kind that we cannot accept. On the question of public expenditure, the right hon. Gentleman will know that a number of Questions have been tabled which will be answered later.