Teachers' Salaries (Tax Equivalent)

HC Deb 23 May 1974 vol 874 cc222-3W

Mr. Michael Latham

asked the Chancellor of the Exchequer by how much it would be necessary to raise the standard rate of value added tax if the full cost of teachers' salaries were met by the Exchequer, and that were paid for entirely by a rise in value added tax.

Dr. Gilbert

The standard rate of VAT would have to be increased to 12½ per cent.

Mr. Michael Latham

asked the Chancellor of the Exchequer by how much it would be necessary to raise all rates of income tax if the full cost of teachers' salaries were met by the Exchequer, and paid for entirely by an increase in income tax.

Dr. Gilbert

Part of the cost of teachers' salaries is at present met by the Exchequer through the rate support grant. To raise additional revenue equal to the remaining cost borne by the local authorities would require an increase in the basic and higher rates of income tax of about two percentage points.