HC Deb 26 March 1981 vol 1 c1067
9. Mr. Chapman

asked the Chancellor of the Exchequer what is his estimate of the revenue which will come from direct and indirect taxation, respectively, in the year 1981–82.

Mr. Brittan

I estimate that about £46 billion will come from direct taxation and about £54 billion from indirect taxation.

Mr. Chapman

Have those proportions changed over the past two years, and if so, in what way? I accept that the level of taxation must be a matter of judgment for my right hon. and learned Friend the Chancellor of the Exchequer—perhaps it would be prudent if I added "and the Cabinet"—shortly before future Budgets, but is it the policy of Her Majesty's Government that the proportions should change in future?

Mr. Brittan

In spite of the increase in taxes such as petroleum revenue tax and North Sea corporation tax, which are direct taxes, the proportion of direct taxation in the total is 1.6 percentage points lower than in 1978–79. I shall be happy to supply the figures for each of the years for which my hon. Friend would like to have them. That reflects the Government's broad policy.

Mr. Ashley

Will the Minister pursue the fiddlers of the black economy with the same energy, enthusiasm and resources that the Department of Health uses to pursue scroungers in the Welfare State?

Mr. Brittan

Fiddlers should be pursued wherever they come from and in whatever aspect they show themselves.

Mr. Wigley

Does the right hon. and learned Gentleman accept that £3.1 billion of the £3.6 billion increase in taxation stems from indirect taxation, which will hit those on lower incomes much harder than those on higher incomes? Does he accept that they will be hit particularly hard as many of them will be drawn into the tax net for the first time? Does he agree that the Budget hits the lowest paid particularly hard?

Mr. Brittan

I do not think that I can accept the figures in that form or the conclusions drawn from them. The hon. Gentleman will know that an estimate of the impact of indirect taxes is being made by the Treasury for the Select Committee on the Treasury and Civil Service. It would be unwise to jump to the conclusions that the hon. Gentleman has arrived at before that estimate is available.