HL Deb 16 December 1970 vol 313 cc1366-7
LORD HAWKE

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government if everyone in the country increases their income by 10 per cent., how much of this can be expected to accrue to the Exchequer:—

  1. (a) by taxes on income;
  2. (b) by taxes on consumption.]

LORD ABERDARE

My Lords, it is estimated that if personal incomes from all sources were to increase uniformly by 10 per cent., additional liabilities to income tax and surtax would account for about 30 per cent. of the increase. Up to about one-eighth of the increase in incomes would be taken in taxes on consumption.

LORD HAWKE

My Lords, I thank the noble Lord for those figures. In view of them, and of the known huge surplus of the Treasury, would not Her Majesty's Government agree that there is ample opportunity for a substantial reduction in the level of taxation which was imposed by the last Government and which has led to so much inflation and so many inflationary wage claims?

LORD ABERDARE

My Lords, these figures are broad generalisations, and of course it is not true—I wish it were—that everybody's income has increased by 10 per cent. Therefore in this hypothetical situation it is difficult for me to comment. I would only say that, while it is true that higher incomes lead to more tax revenue, it is highly regrettable that this sort of inflationary situation should be the one in which we live. We are doing our utmost to prevent it.