HC Deb 27 July 1978 vol 954 cc1784-5
11. Mr. Rifkind

asked the Chancellor of the Exchequer if he is satisfied with his estimate that there will be more taxpayers in 1978–79 than in 1977–78.

Mr. Denzil Davies

The numbers of taxpayers in 1977–78 were lower than they otherwise would have been as a result of the increases in personal allowances made last autumn in anticipation of the indexation required for 1978–79. The numbers for 1978–79 are about 300,000 less than for 1976–77. This year's main Budget proposal—the lower rate band—benefits large numbers of the lower paid but does not itself alter the number of taxpayers.

Mr. Rifkind

Will the right hon. Gentleman confirm that there are likely to be more than 1 million more taxpayers this year than there were at the beginning of 1974? As there has been no general increase in the prosperity of the British public over those four years, will the Minister accept that the people who have profited most from inflation have been the Government themselves?

Mr. Davies

Criticism from Conservative Members about the level of taxation and the number of taxpayers would be better received if the Conservatives were to tell us how they would compensate for the kind of reductions in taxation which they are always calling for. Those reductions would fall upon public expenditure and affect people at the lower end of the scale.

Mr. Frank Allaun

While I welcome tax relief on lower incomes, may I ask my right hon. Friend to accept the proposals made yesterday by the TUC and the Labour Party in the document "Into the Eighties" for an expansion of housing, health, schools and social services, particularly as this would relieve need and at the same time provide employment, which is what we need most of all?

Mr. Davies

This Government will always be concerned with the expansion of the public services. Indeed, this is one of our priorities. Unfortunately, that expansion must be financed through taxation or borrowing. These are often two constraints on that expansion.

Mr. Peter Rees

Arising out of the right hon. Gentleman's reply to my hon. Friend the Member for Edinburgh, Pent-lands (Mr. Rifkind), will he confirm that, notwithstanding the cuts carried by the Opposition in this year's Finance Bill, the Government will still be taking more by way of income tax in the year 1978–79 than in 1977–78?

Mr. Davies

The hon. and learned Gentleman should put down a specific Question on that. But I repeat what I said. Conservative Members concentrate on taxation but never tell us the other side of the balance sheet, which is a reduction in public expenditure. When they tell us how they will reduce public expenditure, I shall answer these questions on taxation.