HC Deb 24 February 1977 vol 926 cc1615-6
6. Mr. Ridsdale

asked the Chancellor of the Exchequer whether he will meet representatives of associations concerned with the welfare of the elderly in order to discuss taxation matters.

Mr. Denzil Davies

My right hon. Friend the Financial Secretary met a deputation from the National Federation of Old Age Pensions Association on 2nd February. There was a general discussion of a number of taxation questions affecting pensioners.

Mr. Ridsdale

Did they discuss the real hardship that is being faced particularly by those who are elderly or living alone? Is he aware that a person receiving £30 a week, which is only half the average weekly wage, has to pay £288 a year in tax? Does he think that is fair and will something be done about it in the Budget?

Mr. Davies

All the difficulties of pensioners, especially those relating to taxation, were discussed when the Financial Secretary met the Association. The figure that the hon. Gentleman has mentioned is higher than the State retirement pension and the reason such a sum is taxed at the level that he mentioned is that we have been partly unable to revalorise the tax thresholds as we could have done had it not been for the effects of inflation.

Mr. Ashley

Is it not remarkable that Opposition Members, who are always demanding cuts in public expenditure, simultaneously demand tax concessions, particularly for politically popular groups? If the Minister is considering help for old people, will he also consider help for the disabled, who are equally important?

Mr. Davies

My hon. Friend has made a valid point. The benefits that we have been able to pay to pensioners and others have partly come from taxation and if there were the large cuts in taxation that Members opposite are demanding one would have to look at the whole position and the effect on public expenditure in general and on social security payments.

Sir G. Howe

Will the Minister and the hon. Member for Stoke-on-Trent, South (Mr. Ashley) accept that one of the reasons we continue to press for reductions in public spending is in order to be able to secure the tax reductions for which we also press? Does the Minister agree that 40 per cent. of investment income surcharge is paid by people who are over 65 years old and that he could raise the starting point for investment income surcharge to a modest £40 a week for less than £20 million a year?

Mr. Davies

The right hon. and learned Gentleman talks glibly about cuts in public expenditure and spending. Perhaps one day he will explain where the cuts will fall, because in order to provide the sort of tax reductions that he and his hon. Friends want he will have substantially to reduce social security pensions and other benefits.

Forward to