§ 4. Mr. Strawasked the Chancellor of the Exchequer what representations he has received as to the effect the Budget measures have had upon the level of taxation as a proportion of earnings in respect of those on average earnings and below and as compared with the relevant proportions in 1978–79.
§ The Minister of State, Treasury (Mr. John Wakeham)For those on average earnings, income tax is a lower proportion now than in 1978–79. For some of those below average earnings, the proportion taken in tax is higher, but the Budget will benefit those on lower pay. Income tax and national insurance contributions together take a higher proportion than in 1978–79, but the real take-home pay of all those whose earnings have increased in line with the national average has increased.
§ Mr. StrawIs the Minister aware that even his first answer does not tally with calculations made by the Library, which show that a family man on average 1004 earnings is still bearing a higher burden in terms of income tax alone—let alone the burden of national insurance and income tax combined—compared with 1978–79? Has the Chief Secretary seen the figures published by the Institute of Fiscal Studies, which show that a jobless man has lost £15 in real terms under this Government, that a man on £130 per week has lost £8, while someone earning £45,000 per year has benefited by the obscene sum of £120 per week? Is that the sort of fair society that the Government were elected to produce?
§ Mr. WakehamThresholds are up by some 5 per cent. since my right hon. and learned Friend's first Budget. The standard rate of tax is some 3 per cent. down. The figures that were reported widely in the press yesterday were after the large increases made by my right hon. and learned Friend in 1979–80 and before the increases made in the last Budget.