HC Deb 01 April 1976 vol 908 cc1557-8
14. Mr. Cryer

asked the Chancellor of the Exchequer if he is satisfied with the present tax structure

Mr. Joel Barnett

My right hon. Friend has already introduced a number of improvements in the tax structure, and the process will continue.

Mr. Cryer

Does my right hon. Friend accept that the redistributive element in the tax structure is far from perfect and that wealthy people could still make a considerable further contribution? Does he accept that other Western European countries, including those in the EEC, have a much higher rate of tax? Does he agree that it is time a wealth tax was introduced, so that the process which he and I want to see—the redistribution of wealth in favour of working people and their families—is carried forward with increasing momentum?

Mr. Barnett

I agree with much of what my hon. Friend says, but in recent years the combination of inflation, the incomes policy and direct taxation has had a considerable redistributive effect, the details of which will be dealt with by my right hon. Friend in his Budget Statement on Tuesday.

Mr. Michael Marshall

Is the Chief Secretary aware that the Government's policy on VAT is a direct incentive to black market activities in the purchase of galvanised eye straining bolts, paraffin lamps and portable tools? Will he make sure that his right hon. Friend does something about it next year, otherwise I shall continue to draw the attention of the House to the anomalies of VAT?

Mr. Barnett

I am sure that the hon. Gentleman will also bear in mind who introduced VAT. My right hon. Friend will bear in mind what the hon. Gentleman said.

Mrs. Millie Miller

When looking at the tax structure, will my right hon. Friend bear in mind that taxation was specifically excluded from consideration under the Sex Discrimination Act, which means that all women, not only widows, suffer serious injustices from taxation, as do people of either sex who are trying single-handed to bring up families?

Mr. Barnett

I think my hon. Friend will know that we are indeed aware of the problems in relation to widows, and particularly single-parent families. We have done a great deal for them already, I am sure that my right hon. Friend in introducing his Budget on Tuesday, will have taken note of all that my hon. Friend has said.

Mr. Bulmer

Will the Chief Secretary tell the House whether the Government anticipated the effect of 25 per cent. VAT on employment—which in my constituency has been disastrous—and, if not, why not?

Mr. Barnett

My right hon. Friend took all these matters into account, and will be doing so when he introduces his Budget on Tuesday.

Mr. Heffer

My hon. Friend said that the various measures taken by the Government on inflation had a considerable effect on the redistribution of wealth. Will he explain what he means?

Mr. Barnett

If my hon. Friend was listening, as I am sure he was, he may have noted that I was referring not to wealth but to the redistribution of income. If he looks at the figures he will find, as I do, that the combination of inflation, incomes policies, and the failure of successive Governments to revalorise personal allowances as much as they would have liked, has had a substantial redistributive effect.