§ 5. Mr. Meadowcroftasked the Chancellor of the Exchequer what is the lowest income at which a single person with only a personal allowance is currently paying less income tax than in 1978–79.
§ Mr. HayhoeWith the exception of those earning between £2,720 and £5,330 a year, all single taxpayers whose earnings have increased in line with the national average are currently paying less income tax as a proportion of their earnings than in 1978–79.
§ Mr. MeadowcroftBut is it not the case that a person has to earn over £22,000 a year before he pays a smaller proportion of his salary in tax and national insurance? Why do the Government give benefits to people who earn more than that amount, instead of giving benefits to those who earn less than that? Surely that is highly objectionable when we are trying to make people conform with policies to control the serious economic problems of this country?
§ Mr. HayhoeI think that most people are concerned about their real take-home pay. There has been a real increase in take-home pay for all those whose pay has risen in line with national average earnings since 1978–79.
§ Mr. Alan HowarthNotwithstanding the increase in income tax thresholds that the Government have achieved, does my hon. Friend agree that the burden of taxation still rests heavily on the lowest paid? Does he further agree that people—for example, members of the alliance parties—who call for higher public expenditure on a cause—however worthy it may be—are calling for an increase in taxation of the poorest members of our society?
§ Mr. HayhoeI endorse what my hon. Friend says. In reply to what he said about the burden on the low-paid, may I point out that, as a result of the changes in recent Budgets, personal allowances have been increased by 20 per cent. in real terms. Moreover, the changes in the national insurance regime announced by my right hon. Friend the Chancellor of the Exchequer in his last Budget were of particular help to the low-paid.