HC Deb 19 July 1979 vol 970 cc1981-2
17. Mr. Ralph Howell

asked the Chancellor of the Exchequer what is the latest estimate of the loss of revenue resulting from tax exemption of short-term benefits.

Mr. Biffen

The latest estimate based on expenditure for 1978–79 in the United Kingdom calculated at benefit rates apply- ing during the year is approximately £400 million.

Mr. Howell

Does my right hon. Friend agree that the fact that short-term benefits are exempt from taxation is a prime reason for people becoming caught in the unemployment trap? Will he assure the House that early action will be taken to tax all income alike to remedy this awful anomaly?

Mr. Biffen

I am in broad sympathy with that view. No doubt my hon. Friend heard the earlier exchanges concerning unemployment benefits, which indicated that a review was being undertaken.

Mr. John Evans

Does the right hon. Gentleman agree that the financing of long-term unemployment benefits will be a greater problem under the present Government than taxing short-term unemployment benefits?

Mr. Biffen

Although I do not doubt that unemployment is likely to rise over the next year, I must say that condemnation comes ill from the Labour Party, which presided over a massive increase in unemployment during the previous Parliament.

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