HC Deb 13 May 1982 vol 23 c938
11. Mr. Campbell-Savours

asked the Chancellor of the Exchequer what further representations he has received on the taxation of unemployment benefit.

Mr. Hayhoe

We continue to receive a number of letters on this topic, expressing a variety of different views.

Mr. Campbell-Savours

Is it not a disgrace that the Government intend to press on with the taxation of unemployment benefit when in the previous Budget they gave £260 million back to the better-off and privileged in society in the form of capital gains tax and capital transfer tax concessions? Does that not reinforce the view of many people that the Government wish to promote a divided nation—a two-nation society?

Mr. Hayhoe

It is right that we should press ahead with the proposals to tax unemployment benefit. But I think that everyone who has ever been concerned with these problems has agreed with it."—[Official Report, Standing Committee D; 23 June 1977, c. 1182.] I am quoting the right hon. Member for Ashton-under-Lyne (Mr. Sheldon).

Mr. Peter Bottomley

Does my hon. Friend accept that the major issue is whether £650 million coming into the Exchequer in taxation should be balanced by returning the £60 million that has been taken in the abatement? Can he tell us whether the Government would prefer the House to drop the taxation proposals, at a cost of £650 million, or whether the Government will restore the £60 million, which is obviously of more benefit to the national exchequer?

Mr. Hayhoe

As my hon. Friend knows, we debated the matter at some length on 26 April. I have nothing to add to what I said then, which made it clear that the abatement will not be a permanent reduction. It wild be made good at the right time.

Mr. Robert Sheldon

Is not the main point that the Government introduced an abatement on the promise that it would be restored when the taxation of unemployment benefit was introduced? They have ratted on that promise. It is all very well postponing the matter to some future date, but the time to have restored the abatement was w hen taxation of unemployment benefit was introduced.

Mr. Hayhoe

I repudiate the suggestion that a promise has been ratted upon. Anyone who examines the record will know that that is not true.