§ Lord KALDORasked Her Majesty's Government:
1118WAOn Question, Whether Clause 5 shall stand part of the Bill? Their Lordships divided: Contents, 71; Not-Contents, 32.
Whether they will provide figures showing the percentages of total income payable in tax, distinguishing between (a) income tax and (b) indirect taxes (including VAT and excise duties and excluding social insurance contributions) for the financial year 1979–80 and (in accordance with the Chancellor of the Exchequer's recent proposals) for the financial years 1980–81 and 1981–82 (assuming that except for the compulsory indexation of income tax allowances, the same taxes are applicable to both of these years) for a married couple without children (husband only earning) in three types of case: (1) with an income of two-thirds average earnings, (2) at full average earnings; and (3) 1½ times average earnings. [For 1979–80 the earnings figures should be those given by the earnings survey of April 1979; for 1980–81 based on the estimate of 1119WA average earnings in April 1980 (the earnings of other categories being derived algebraically) and for the year 1981–82 calculated on the assumption that the rise of both earnings and prices (excluding such increases in prices as are directly attributable to changes in indirect taxation proposed in the recent Budget Statement) will be 18 per cent. between April 1980 and April 1981].
§ The MINISTER of STATE, TREASURY (Lord Cockfield)The estimates for which the noble Lord asks and on the assumptions he specifies are as follows:
Income Tax per cent. Indirect Taxes per cent. 1979–80 Two-thirds average earnings 13.4 10.0 Average earnings … … 19.0 10.2 1½ average earnings … 22.6 10.5 1980–81 Two-thirds average earnings 14.5 10.5 Average earnings … … 19.7 10.8 1½ average earnings … 23.1 11.1 1981–82 Two-thirds average earnings 14.5 9.6 Average earnings … … 19.7 10.1 1½ average earnings … 23.1 10.5 The indirect tax figures are estimated using the 1978 Family Expenditure Survey. Proportions spent on indirect taxes at different levels of expenditure were estimated and applied to total expenditure calculated from net income. Indirect taxes on intermediate goods are not included. The figures assume that expenditure patterns remain unchanged in spite of real changes in indirect tax rates and other factors. In so far as consumers switch spending from goods subject to an increase in taxes, the figures will exaggerate these estimates.