§ Sir B. Rhys Williams
asked the Chancellor of the Exchequer (1) what is his estimate of the reduction in the number of staff in the Inland Revenue Department to be achieved by abolishing National Insurance contributions and making income tax leviable upon all personal incomes at a flat rate without allowances or concessions;
(2) what is his estimate of the number of additional staff required in his Department on the basis of payment of positive allowances in the same way as family allowances to every person now eligible to be taken into account in computation of income tax for the grant of a personal allowance, married allowance, child allowance, or other tax concession which may be claimed in respect of age, disability or dependency;
(3) what is his estimate of the saving to employers in the administration of Pay As You Earn as a result of levying income tax at a flat rate on all income and combining National Insurance contributions with income tax.
§ Mr. Patrick Jenkin
Simply to abolish National Insurance contributions and charge income tax at a flat rate on all income, with no allowances or deductions, would achieve significant staff savings in the Inland Revenue. It is not possible, on the information given, to estimate the extra staff that would be needed to operate a system of cash payments in place of income tax allowances; but the combined effect of the two changes would be likely to mean more work overall. No estimate can be given of the savings to employers from operating a scheme on the lines proposed.