Added: Rashonda Port - Date: 13.05.2022 19:04 - Views: 23848 - Clicks: 2117
As amended in the Committee and in the Standing Committeefurther considered. I beg to move Amendment No. With this we shall take Government Amendments Nos. This group of amendments seeks to increase the main personal allowances. I am coming to my hon. Friend's view. The hon. Member for Blaby wants to index to help people at the lower end of the tax threshold—those with the lowest possible levels of income.
But he recognises, as does my hon. Wisethat we cannot do that in a broad-based tax system. We cannot increase the tax threshold and help only those at the bottom end of the tax scale. That is why the increase in personal tax allowances and the raising of the threshold are so costly in terms of lost revenue. Does my right hon. Friend accept that the raising of the tax threshold nevertheless comes nearest to concentrating help on those at the lower end and that that is the way to minimise the spillover into the higher bands?
I shall be coming to my hon. Friend's arguments. They are serious and I want to deal with them.
I agree that we want to raise the tax threshold as much as we can, but it is not possible to take so narrow and simple a view of how to use the limited resources available. I want to deal precisely with that kind of problem. The right hon. Member for Down, South Mr. Powell always takes a simple view about these matters. I am not suggesting that he is a simple man. I do not believe that the position is quite so clear. I suggest that in the case of partial indexation the answer is not proven.
That doyen of indexers, Sam Brittan, unlike Milton Friedman, said that international data did not prove the case either way. That is why I am a semi-agnostic on this issue. My right hon. Friend is correct, but that is different from his earlier statement.
We have not supported the indexation of these thresholds because we object to a transfer from direct to indirect taxation. We object to a transfer from company taxation to individual taxation and from the better-off to the worse-off individuals. My hon.
Friend cannot have it all ways. She cannot index direct taxation without helping the highest paid as well as the lowest paid—she knows that that is the case.
I do not object, because I think that the trend in recent years of a switch to direct taxation has squeezed differentials to a degree that is generally unacceptable. But what my hon. Friend seeks to do is pretend that she was helping only those at the lowest end of the direct tax scale and no one else. Surely my right hon. Friend is trying to have it both ways by seeking to say that the only way in which the higher paid get help is through the spin-off effect of raising thresholds.
The effect of raising the thresholds in the Budget was that the higher paid took it all. That is what we objected to. The higher paid, through the Budget, were to benefit by more than the rate of inflation of last year. That is why we were forced into the position in which we found ourselves in Committee, supporting the people at the lower end of the scale.
Friend cannot have it as easy as that. The cost of raising the thresholds at that end would have given only a tiny figure to those at the lower end of the scale. The Opposition amendments, which my hon. The reliefs we gave in the Budget were nothing like that figure. On top of that, the extra tax put on the higher-paid in the last three years has been very substantial. To try to pretend that one can reduce direct taxation only for one section of direct taxpayers is to be misleading.
On 7th April my right hon. Thus, those earning more than the average wage were getting twice as much in total as those earning under the average wage. There was, therefore, more than enough money to spare for the changes that my hon. Wise and I sought to bring about. Friend has made my case for me.
What he did in Committee—I am not criticising him, because I. I do not blame my hon. Friend for it. It is inevitable in a direct taxation system. One cannot avoid it. Friend is right to quote back at me my Answer of 7th April. That is what happens when one raises thresholds and higher rate bands. But is it not true that an alteration in the tax thresholds helps the low paid more than a reduction in the standard rate? Friend is right, out she has confused her questions. She asks me whether it is not the case that the lower paid get more under the proposals she supports.
The answer is that they do not—the higher paid get more. Friend must not confuse her own questions and also try to confuse my answers. She knows that I am easily confused in these matters. Gentleman, who re so easily the mind of the right hon. Howehas not in this case succeeded in reading mine.
Gentleman is not accurate in saying that it is the House that will have the choice, because no one, except someone sitting on the Government Front Bench, will have an opporunity to propose a motion that will increase taxation. What the right hon. Gentleman is saying is that the Government, if they dare, will have that opportunity.
That is different from saying that the House will have the choice, and therein, I admit, there is some distinction between this and the case of proportional representation. Of course it will. With respect, the Government—as we have seen in the recent Finance Bill Committee—can propose, but the House disposes. This is something with which the Government will have to live.
I hope that we shall continue to have independent Back-Bench Members. I hope, too, that those on our side of the House will always agree with me. I am putting forward such obviously sensible proposals that I am surprised they do not agree with them. Although the right hon.
Gentleman is strictly accurate and it will have to be the Government who put down the motion, it will not be the Government who will decide whether it is carried.Seeking benefical Enfield
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