§ LORD FRASER OF LONSDALEMy Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether they will consider the introduction of a negative income tax as 595 an efficient means of redistributing wealth.]
EARL JELLICOEMy Lords, Her Majesty's Government propose to make a real effort to try to devise a practical form of negative income tax which would pay benefits related to family need.
§ LORD FRASER OF LONSDALEMy Lords, while thanking the noble Earl for that relatively satisfactory Answer, may I ask him whether Her Majesty's Government are impressed with this psychological advantage; namely, that hundreds of thousands of citizens are used to having their income tested by Government, and that the rich can be taxed and the poor can be helped without discrimination if a positive and a negative income tax were adopted?
EARL JELLICOEMy Lords, while thanking my noble friend for his relatively kindly supplementary question, I should like to reply that this of course is one of the advantages in one of the many possible variants of negative income tax. But, of course, there are great practical difficulties in the way of such a system, and the whole matter will need very careful examination.
§ LORD BYERSMy Lords, is not negative income tax what Mr. Macleod promised during the Election?
EARL JELLICOEMy Lords, the noble Lord is not in fact quite right. What Mr. Macleod said was that there was great promise in this system and that this was a matter which would be investigated by the incoming Administration. That is precisely what the Administration, having come in, propose to do.
§ LORD BYERSMy Lords, this is quite different from those sweeping tax reductions.