§ Mr. Carmichaelasked the Chancellor of the Exchequer if he will publish the administrative costs, staffing implications, revenue yields over a range of tax rates, of the various possibilities discussed and then rejected in Command Paper No. 6890, paragraphs 23–60.
§ Mr. Robert SheldonParagraphs 23 to 60 of Cmnd. 6890 provided a considerable amount of information on these matters. In certain cases detailed information was not provided because the introduction of certain taxes would not be permissible under EEC law. Taxes falling into this category include Scottish and Welsh supplements to VAT, a general sales tax in Scotland or Wales, and differential taxes in Scotland and Wales on cigarettes. In relation to the remaining taxes, I am afraid that in most cases it would not be possible to provide all the information asked for by my hon. Friend except at disproportionate cost to public funds. The only additional information I can provide is given below.
Income Tax
Paragraphs 23 to 36 of Cmnd. 6890 discussed the case for a supplementary income tax to be paid by taxpayers resident in Scotland and Wales. Each additional 1p on the basic rate in 1975–76 would have yielded about £38 million additional revenue in Scotland and about £18 million in Wales. The corresponding staff costs are given in paragraph 36: 3,500 for Scotland and Wales at a cost of about £15 million and 2,500 staff for Scotland alone.
69WAn income tax based on a person's place of employment would probably yield about the same amounts as a residence-based income tax, though as noted in paragraph 37 of Cmnd. 6890, rather fewer administrative staff would be required—perhaps 2,000 for a tax relating to Scotland alone.
Paragraph 38 of Cmnd. 6890 discussed an alternative approach under which the Assemblies would receive the whole yield of income tax payable in Scotland and Wales respectively and would also be free to fix their own income tax rates. The estimated total income tax payable by Scottish residents for 1975–76 was £1,330 million. The corresponding figure for Wales was £630 million.
Sales Taxes on Particular Commodities
There would be severe practical difficulties in imposing differential taxes on top of existing national duties on hydrocarbon oils and alcoholic drinks, as indicated in paragraph 45 of Cmnd. 6890, and it is not possible to estimate the staffing requirements and administrative costs which would arise though they would inevitably be relatively high. However, the proportion of total United Kingdom receipts for these duties that was borne by residents in Scotland and Wales can be estimated on the basis of other statistics such as those contained in the Family Expenditure Survey. On this approach a supplementary tax of 10 per cent. on hydrocarbon oil duty in 1975–76 might have produced a gross yield—that is, before allowing for the effects on demand of increased taxation—of about £13 million in Scotland and £9 million in Wales. Similarly, a 10 per cent. surcharge on all duties on alcoholic drink might have resulted in a gross yield of about £20 million in Scotland and about £7 million in Wales.
A Tax on the Occupatiorn of Property
As noted in paragraph 46 of Cmnd. 6890, the Government originally proposed that the devolved administrations should have power to place a surcharge on the rates but this did not find public favour. A 10 per cent. surcharge on local authority rates in 1975–76 in Scotland would have yielded about £40 million in Scotland and about £15 million in Wales. If such a surcharge had been collected by local authorities, the administrative 70W costs would have been relatively small.