HC Deb 28 April 1983 vol 41 c982
5. Mr. Hooley

asked the Chancellor of the Exchequer what has been the trend since 1979 in the balance of taxation as between the taxation of personal incomes and the taxation of companies and corporations and the corporate bodies.

Mr. Wakeham

Both taxation on business and the burden of income tax on total personal income have been reducd by my right hon. and learned Friend the Chancellor. Since 1979 priority has been given to business, but both have been reduced in real terms. As is well known, national insurance contributions for employers and employees have risen, as have the benefits that they finance.

Mr. Hooley

Is the Minister aware that that is not a reply to my question? He talked about parallel trends, whereas I asked for the balance between the two trends. Will he confirm that the balance has shifted against the individual taxpayer, which is further evidence of the Conservative party's failure to honour pledges that it made before the general election?

Mr. Wakeham

I made it clear in my original answer that priority should be given to business in view of the general world economic position.

Mr. Robert Sheldon

Is not the serious problem that has now overtaken the low amount of revenue that we obtain from corporation tax directly connected with the £30 billion of unused capital allowances? That vast sum makes nonsense of the entire corporation tax scheme. What does the Minister suggest we could do to obtain from that sector of the economy the taxes that are due from it?

Mr. Wakeham

I do not agree with the right hon. Gentleman's analysis. The low return from corporation tax is due to the low profitability of British industry, which was a problem long before this Government came to office. The Government's policies will help industry, which will produce better profits and, therefore, a better yield from corporation tax.