HC Deb 31 January 1991 vol 184 cc1091-2
3. Mr. Bowis

To ask the Chancellor of the Exchequer what percentage of income tax receipts came from the top 10 per cent. of earners in 1979, 1981 and 1990.

The Financial Secretary to the Treasury (Mr. Francis Maude)

The top 10 per cent. of taxpayers paid about 35 per cent. of the total yield of income tax in 1978–79 and 1981–82. That rose to 42 per cent. in 1990–91.

Mr. Bowis

Does not my hon. Friend's answer show that, as the Government's policy of reducing tax rates continues, those who can afford the most will bear the biggest share of the tax burden? Does not it also show that, as tax rates come down, tax revenue goes up, enabling us to afford to care for those in need, pay for better-quality services and cover eventualities and emergencies such as the Gulf war?

Mr. Maude

My hon. Friend puts the point very well. It is disturbing to find that—in the face of both the strong theoretical case that lower tax rates increase the yield of tax and the practical experience that demonstrates it conclusively—the Labour party still clings remorselessly to the old, faded dogmas of the past. Even as my hon. Friend asked his supplementary question, Labour voices could be heard saying, "There could be more: we could be raising more." I can tell the right hon. and learned Member for Monklands, East (Mr. Smith) that the one way to ensure that more money is not raised from the better off is to increase the high levels of tax levied on them.

Mr. Skinner

Why does not the Minister admit that, in the first 10 years of this Tory Government, the wealthiest 1 per cent. in Britain have received £26.2 billion in tax cuts, while the poor have been taxed to the hilt? Does not the Minister appreciate that that money should have been spent on hospitals, homes, education, pensions and on getting rid of cardboard city?

Mr. Maude

The hon. Gentleman simply has not been listening: if he had, he would have heard that the top 10 per cent. of taxpayers—those who are best off in society—have paid more and more in tax. They have also been allowed to keep more and I do not think that there is anything deplorable about that. The only argument for increasing tax rates for the better-off is based wholly on spite and envy; it is certainly not based on the desirability of increasing the yield to the Government.

Dr. Marek

Will the Minister admit that the increase in Treasury revenue might have something to do with the fact that the rich—for example, the chief executives of our companies and industries—may just have been paying themselves more? For the past few years, they have been paying themselves 30 per cent. more each year, while the overwhelming majority in the country have received wage increases of less than 10 per cent.

Mr. Maude

Again we hear the old, faded voices calling for a return to the politics of spite and envy. British industry and British business are now vastly more successful, and have created much more wealth for everyone in society, than was the case before; if managers and executives have played an important part in that, I see nothing wrong with rewarding them.