§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer, pursuant to his answer of 23 July,Official Report, column 591, on changes in disposable income, for what reason the effects of indirect tax changes including excise duties, in the July 1997 Budget were not included in his answer. [11367]
§ Mr. Geofrey Robinson[holding answer 29 July 1997]: The hon. Member asked for the percentage change in after-tax disposable income. Disposable income is generally defined in economic literature as personal income minus personal taxes, where personal taxes consist of inheritance taxes, property taxes and personal income taxes. Disposable income is that part of income which households may use in any way they wish. The amount of indirect taxes paid depends upon what individual households choose to consume—for instance, those households who choose to spend their income on cigarettes will pay more indirect tax than those who choose to spend their income on books.
For estimates of the effects of the tax changes, including indirect taxes, announced in the Budget, I refer the hon. Member to the reply given to the right hon. Member for Wells (Mr. Heathcoat-Amory) on 16 July Official Report, columns 167–68.