§ Mr. Arthur Lewisasked the Chancellor of the Exchequer by what extent the internal purchasing value of the £sterling or the cost of living has risen since the date when capital gains tax on shares was introduced; and if he will seek to amend the datum line to account for this fall in the purchasing value of the £ sterling so far as capital gains tax is concerned.
§ Mr. Peter ReesThe internal purchasing value of the pound has fallen by 78 per cent. between April 1965, when capital gains tax was introduced, and May 1980, the latest month for which information is available. As my right hon. and learned Friend said in his Budget Statement, indexing capital gains tax would result in an unwelcome increase in the cost of administration while reducing the yield of the tax to negligible proportions. However, we are continuing our review of the capital taxes.