§ 13. Mr. Ian Taylor
To ask the Chancellor of the Exchequer what information he has as to what will be the higher rates of income tax in each of the major industrial countries in 1988–89.
§ 18. Mr. Sackville
To ask the Chancellor of the Exchequer what information he has about the higher rates of income tax in each of the major industrial countries in 1988–89.
§ Mr. Taylor
I thank my right hon. Friend for that information. Does it not prove that as a result of the Budget Britain is one of the most attractive countries internationally? Will it not lead to an increased number of industries moving into this country, providing more jobs and thus increasing the amount of revenue coming to the Exchequer, for the benefit of all citizens?
§ Mr. Major
We certainly hope and expect that there will be an increased flow of inward investment. However, there has been a substantial amount of inward investment in recent years. There was £6.1billion in 1987 alone, the largest figure ever recorded, and £2.6million in Scotland alone over the past few years.
§ Mr. Sackville
Does my right hon. Friend agree that penal rates of taxation damage the economy as a whole and help no section of society? Does he further accept that there may be no economic justification for any level of income tax higher than the basic rate?
§ Mr. Tom Clarke
In view of the proposals for capital taxation, why does the Government's philosophy of easing dependence apply to those who seek social security but not to those who benefit from inherited wealth? Can the Minister offer a scrap of evidence that the sons or daughters of those who benefit from unearned income will use that for the greater good? Why should they be dependent? Why should the enterprise ethic apply purely to the poorest of the poor?
§ Dr. Reid
Do not the Minister's answers represent two-nation Toryism at its worst? Does he recall the answer given to my hon. Friend the Member for Fife, Central (Mr. McLeish) that a single person earning over £300,000 a year will benefit by £1,000 a week? Will he contrast that with the admission made yesterday by the Prime Minister that a single person earning less than £50 a week will be £7.80 a week worse off after the social security cuts? Does that not represent two nations, or are they both part of the same big happy family?
§ Mr. Major
Perhaps I might remind the hon. Gentleman that before any tax cuts were contemplated in the Budget an extra £2,000 million was allocated to social security expenditure for the forthcoming year. On the matter of higher and lower rates of tax, I must say that high taxes do not redistribute income; all they do is redistribute it to taxpayers and that is of no use to anyone.
§ Following is the information:
|Higher rates of income tax (percentage) for a married couple without children Group of Seven countries|
|Country||Top rates(s)||Total number of rate-bands|
§ Notes to figures in table:
- 1. The rates relate to employment income; it is assumed that this is all earned by the husband.
- 2. The figures reflect the latest enacted rates, as far as is known.
- 3. The figures for Canada include provisional taxes at the rate for Ontario; those for Japan include local taxes at the typical rate; those for the USA include State taxes at the Californian rate.
- 4. The German income tax system does not have rate bands as such. Rates rise gradually from the starting rate of 22 per cent. until the top rate of 56 per cent. is reached.