HC Deb 24 January 1980 vol 977 cc634-5
9. Mr. Michael Brown

asked the Chancellor of the Exchequer how many people in employment he hopes will be taken out of the income tax net during 1980.

Sir Geoffrey Howe

The numbers for 1980–81 will depend on the level of the tax allowances for the year. I ask my hon. Friend to wait for my Budget Statement on that.

Mr. Brown

I recognise that the Chancellor cannot anticipate his Budget. However, will he bear in mind that many people at the lower end of the pay scale are receiving relatively less than those receving social security benefits? Is he aware that, in order to make it worth while for them to work, they will have to be offered substantial tax reductions, or, if possible, taken out of the tax net?

Sir G. Howe

My hon. Friend makes an entirely valid point, which I had in mind when I raised the tax thresholds substantially last year. He underlines that it should not be overlooked that those on low pay—as much as anyone else in the country—have a powerful interest in the reduction of excessive public spending, if we are to move towards a sensible tax structure.

Mr. Denzil Davies

Since the Chief Secretary has said that we are in for three years of unparalleled austerity, will the Chancellor make clear that there will be no reduction in capital taxes in the next Budget? It will not be fair if the owners of capital get the benefit. Does he not agree that all members of the community should suffer from this "unparalleled austerity".

Sir G. Howe

I shall not anticipate my next Budget Statement in any respect. The right hon. Gentleman should bear in mind that if the structure of capital taxation is one of the matters affecting the supply side of the economy—as Lord Lever believed it to be when the previous Government were in power, and as many people now believe it to be—it is a legitimate matter for consideration.