HC Deb 22 May 1980 vol 985 cc705-6
15. Sir Brandon Rhys Williams

asked the Chancellor of the Exchequer if he will take steps to simplify the income tax system before proceeding with the transfer of Pay-As-You-Earn to computers; and if he will seek to put personal taxation on a unisex basis.

Mr. Lawson

The Inland Revenue's plans for computerising PAYE envisage automation of, broadly, the existing system, but of course we are always seeking to simplify this where possible. My right hon. and learned Friend announced in his Budget Statement that we would be issuing a Green Paper on the taxation of husband and wife later this year.

Sir B. Rhys Williams

Will my hon. Friend give an undertaking that putting PAYE on to a computer will not place obstacles in the future to reforms of the income tax system, with a view to simplifying it and removing its disincentive effects? Can my hon. Friend say, in particular, that computerisation will not obstruct the recognition of social changes such as the fact that women are entitled to be treated as independent and equal persons both as to their property and their income?

Mr. Lawson

As with any large computer project, computerisation of PAYE implies some constraints on changes in the personal tax system during the implementation period. I hope that the conclusions that are reached as a result of the consultations which follow the publication of the Green Paper to which I referred will not be impeded by those constraints.

Mr. James A. Dunn

Will the Minister take an opportunity to describe the procedures in which the individual contributor to the tax system will be involved? These are complex matters. Will the Minister also ensure that the computer and equipment to be used will be British?

Mr. Lawson

The hon. Gentleman is right. These are complex matters upon which I do not feel professionally competent to pronounce. Certainly all these considerations will be gone into very carefully.

Mr. Henderson

Will my hon. Friend ensure that he is not bamboozled by civil servants into believing that a computer system necessarily makes it more rigid and that provision can be made not only to amend the system in future, if need be, but that it will be easier to do so if appropriate steps are taken at an early enough stage?

Mr. Lawson

My hon. Friend has slightly misunderstood the position. Once the computer system is fully operational there will be much greater flexibility, not greater rigidity. The constraints appear only during the period when the changeover takes place.

Mr. Denzil Davies

Will the Financial Secretary give a clear assurance to the House that the computer system will not be so inflexible as to prevent any future Government from changing the PAYE system to a non-cumulative system or bringing in a system of self-assessment?

Mr. Lawson

I hope that when the system is fully operational—we hope that that will be by 1986–87—there will be that degree of flexibility.