§ 6. Mr. Ralph Howell
asked the Chancellor of the Exchequer why income tax is deducted from persons who receive family income supplement.
§ Mr. Peter Rees
Recipients of family income supplement are liable to tax if their income is above the tax thresholds.
§ Mr. Howell
I consider that a very unsatisfactory reply. Is the Minister aware of how ludicrous it is that a man with three children, earning as little as £55 per week, pays £5.31 in tax and receives £5 in family income supplement? When will we stop this nonsense? I ask my hon. and learned Friend to urge his right hon. and learned Friend to do something about this in the Budget. The only way to solve this problem is to raise tax thresholds well clear of FIS levels and I urge that most strongly.
§ Mr. Rees
I hope that, on reflection, the House and my hon. Friend will recognise that my answer to his question was entirely factual. I note the point he made about thresholds. I am sure that the House will recall the dramatic increase in thresholds in both the first and second Finance Bills of last year.