HC Deb 29 June 1978 vol 952 cc1559-60
10. Mr. Jessel

asked the Chancellor of the Exchequer how much revenue is now expected in the current year from direct taxation; and how much from indirect taxation.

Mr. Robert Sheldon

Taking the proposed increase in the national insurance surcharge into account in conjunction with the Finance Bill, receipts in 1978–79 from direct taxes, including employees' national insurance contributions, are expected to be around £27.9 billion, compared with £29.0 billion from indirect taxes, which include employers' national insurance contributions and local authority rates.

Mr. Jessel

In order to cut income tax substantially and put incentives into the economy, when do the Government intend to try to bring about a really massive shift from direct to indirect taxation?

Mr. Sheldon

The hon. Gentleman will be aware that there has been a considerable movement as a result of the last Budget. I have pointed out that the burden has shifted in the way that I have described. If the hon. Gentleman looks at the figures, he will see that this is so.

Mr. Flannery

Does my right hon. Friend agree that indirect taxation bears most heavily on that section of the community which can least pay? Is that not the policy of the Conservative Party—to make those people who have least pay more? Inside the next few weeks, should that not be made known as widely as possible?

Mr. Sheldon

Certainly it will be my aim to ensure that the information that my hon. Friend has given is made more widely known. Although not as progressive as income taxes, indirect taxes, as a result of certain changes that have been introduced—such as the extension of these zero ratings and certain other changes—are not quite so regressive as they once were.