HC Deb 21 June 1979 vol 968 cc1482-5
6. Mr. Meacher

asked the Chancellor of the Exchequer what are the latest figures for the yield of corporation tax and income tax, respectively.

Mr. Lawson

Receipts in 1978–79 were—corporation tax, £3,938 million; income tax, £18,776 million. The estimates for 1979–80, after the Budget changes, are £4,850 million and £19,655 million, respectively.

Mr. Meacher

How can it be right for the average low-paid worker to have to pay about 15 per cent. of his gross income in income tax while in the last company accounting year BP paid literally nil corporation tax out of profits of £1,800 million and 11 others of the top 20 companies also paid nil corporation tax? What is the hon. Gentleman doing to rectify that massive under-taxation of top companies?

Mr. Lawson

The average rate of tax over trading profits is 24 per cent. for companies as a whole—not nil. However, the hon. Gentleman should realise that the economy would be a great deal healthier and that the living standards of the poor, about whom he professes such concern, would be a great deal better if British companies made bigger profits—if they were more profitable rather than less.

Mr. David Price

Does not my hon. Friend agree that the figures that he has just given prove my point that, if it were not for the "Healey head tax", the Chancellor would have been able to reduce income tax to 16p in the pound and not only to 30p?

Mr. Lawson

I congratulate my hon. Friend on having been called a second time so soon. Once again, he has made a good point.

Mr. Richard Wainwright

Bearing in mind the low and declining rate of growth bequeathed by the previous Government, and the measures in the Budget, when does the Financial Secretary expect the rate for corporation tax to be positively buoyant?

Mr. Lawson

I am not in the business of giving forecasts, but it is certainly our hope that there will be a recovery in corporate profits. I am glad to have the support of the Liberal Party to this end, even if not of the main Opposition party.

Mr. Denzil Davies

The hon. Gentleman says that he is not in the business of giving forecasts. Will he confirm that the 9 per cent. figure for money supply in the Red Book is a target and not just one of the vague forecasts that he seems to like to put in the rest of the Red Book?

Mr. Lawson

I am glad that the right hon. Gentleman raised that. Indeed it is a firm target, and we shall attempt to hit that target.

Mr. Cormack

Can my hon. Friend arrange for every taxpayer to be informed that a third of his income tax is spent on servicing the debt incurred by the last Government?

Mr. Lawson

My hon. Friend is absolutely right that the last Government succeeded in an event unparalleled in history—getting at the same time a massive depreciation of the currency and an increase in real terms in the National Debt. I do not think that that double had ever been achieved before.

15. Mr. George Robertson

asked the Chancellor of the Exchequer what was the total revenue in each of the last four fiscal years from (a) capital gains tax, (b) capital transfer tax, and (c) estate duty, respectively.

Mr. Lawson

Since the answer contains a number of figures, I hope that the hon. Gentleman will forgive me if, with permission, I circulate it in the Official Report.

Mr. Robertson

Since I have a good idea that the figures will show that we in this country are still raising a smaller proportion of the total tax take from taxes on capital than is done even in the very un-Socialist United States, will the Treasury consider increasing the amount taken in taxes on capital and reducing taxes on expenditure among the weakest and poorest in the community?

Mr. Lawson

If the hon. Gentleman had already had the figures, I should have been surprised at his asking that question. What he fails to recognise is that capital taxation in this country at the present level, which is very high by international comparisons, is having a damaging effect on enterprise and initiative, and particularly on small businesses, agriculture and our national heritage. This is not, of course, reflected in the absolute figures at present, but we see it reflected in the yield of capital taxes at the end of the day, and the truth is that, because of the transitional arrangements, the full yield of capital transfer tax has not yet been felt. This is why we intend to introduce relieving measures.

Following are the figures:

£ million 1975–76
(a) Capital gains tax 386.7
(b) Capital transfer tax 117.6
(c) Estate duty 212.3
1976–77
(a) Capital gains tax 323.4
(b) Capital transfer tax 259.2
(c) Estate duty 124.4
1977–78
(a) Capital gains tax 339.9
(b) Capital transfer tax 331.2
(c) Estate duty 86.4
1978–79
(a) Capital gains tax 352.9
(b) Capital transfer tax 323.2
(c) Estate duty 46.1

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