§ Mr. Deakins
asked the Chancellor of the Exchequer what criteria he uses to assess the effects of changes in direct taxation; and if he will estimate the change in the productivity of high income earners since the 1979 Budget.
§ Mr. Ridley
The implications of tax changes for the distribution of after-tax income and for work incentives are among the effects considered. I have no doubt that the reduction of the very high rates on high earnings was a necessary and beneficial step, and that it has contributed to the higher productivity of recent years.