Clause 1. — ;(Charge of Income Tax for 1955–56 and Surtax Rates for 1954–55.)

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 27th April 1955.

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Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne 12:00 am, 27th April 1955

If one tries to deal with the matter by increasing wages to meet the increasing cost of living, one may very well for the moment produce the effect which one wants. One may produce a rise in real wages. However, that would be a solution at the cost of inflation. That is what inflation is—rising prices, rising wages, rising wages send prices up again and then the wages have to go up again and one has the inflationary spiral which it has been the objective of every Government since 1945 to prevent.

What has the Chancellor done? He has taken this£150 million or so, and, instead of using it without increasing wages to enable the lower income groups to meet the increased cost of living, he has given it to those who confessedly need it least. The important thing about Income Tax is not what one pays, but what one has left after paying. If one is talking about incentives, then incentives are best directed to increasing at the lower end, the working end, the actual purchasing power of those who admittedly have the lowest purchasing power and who are suffering most from the rising cost of living which is an admitted fact and the basic element in the situation.