§ 17. Mr. Ralph Howellasked the Chancellor of the Exchequer whether he has 708 any further plans to reform the tax system to provide sufficient incentives to those who at present can obtain without working benefits equivalent to the take-home pay which they would be likely to earn in employment.
Mr. BifftenThe Government's objective is to reduce the burden of direct taxation for all members of the community, including the lower paid. The present imbalance between in-work and out-of-work income will also be reduced by taxing the short-term social security benefits available to those not working.
§ Mr. HowellDoes my hon. Friend agree that it is neither reasonable nor acceptable to deduct income tax and national insurance contributions from low-paid workers in such a way that they are little better off—in some cases they are worse off—than they would be if they relied entirely on State benefits?
§ Mr. BiffenThat clearly is a factor in Government thinking and one of the reasons why my right hon. and learned Friend was so anxious to increase the tax thresholds in his recent Budget.