Amendment of the Law

Part of the debate – in the House of Commons at 12:00 am on 3rd May 1966.

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Photo of Mr Frederic Harris Mr Frederic Harris , Croydon North West 12:00 am, 3rd May 1966

It may be privilege. A year ago the Financial Secretary tried to palm me off by saying in a letter that the percentage was roughly 1 per cent. This was undoubtedly an under-statement. Then the Parliamentary Secretary to the Ministry of Transport, who answered me in the Adjournment debate, gave a most unsatisfactory reply. It is obvious to many that between £5 million and £7 million a year of such tax is not being paid. This was at a time when the new Minister of Transport announced that she was cutting the road programme for 1966–67 by £19 million, and at a time when we had the highest ever number of road deaths.

There is always the honest person who, unfortunately, forgets to renew his licence. This could be overcome. It would not be difficult to send out reminders as is done in the case of radio and television licences, driving licences and dog licences. There is, too, the dishonest person, who will try to get away with this as long as he or she possibly can. Although I could not develop a full alternative in the Adjournment debate I did put forward a system in which something like 6d. a gallon was put on the price of petrol. This would automatically get rid of tax dodging and eliminate the task of the frustrated and already overworked policemen, who are trying hard to find the offenders and who are constantly bombarded by the public, complaining about such offenders. It would also dispense with the services of a large number of local authority employees who are now engaged in this work and who could be given much more satisfying work to do.

It would save a very considerable amount of money and would be fairer to the man who used his car only at the weekends. The man who used his car more frequently would accordingly pay a little more. We need some original thinking along these lines. It would undoubtedly pay dividends. Most of us know of other ways in which simplifica- tion of the tax system could be brought about. Why do not the Government attempt to do something about this? At present the honest taxpayer undoubtedly pays for the dishonest taxpayer. This is aggravated more as taxes are increased, as invariably happens in each Budget. The ever-increasing burden of tax is surely only a very short-term answer to the country's economic problems. In the long run, we must lose out.

We must provide incentives greatly to increase our national productivity and to keep prices more steady, particularly export prices, in this very keen competitive world, for exports are our lifeblood, otherwise we shall gradually grind ourselves to a halt. But it will be the people who will suffer from such lack of leadership and guidance by the Government. One deplorable economic setback last year was undoubtedly in regard to the essential savings which are as valuable to the Treasury, if not more so, as taxation.

During the 13 years that the Conservatives were in power, National Savings increased by £200 million a year. But, unfortunately, last year they went from a net surplus of £232 million in 1964 to a net deficit of £26 million. In such inflationary times, how can we seriously blame people if they put savings into more tangible assets which are more liable to hold their values rather than into cash or National Savings Certificates? I had hoped that this afternoon the Chancellor of the Exchequer would have attempted to make a more dramatic statement in this respect to find a way of halting this very disturbing decline and to get savings back on the right road again. But he has gone about it only very quietly indeed and made some very small alterations. I find this aspect extremely disturbing.

I wish to make a point which I should like to be passed on to the Chancellor of the Exchequer. It may be considered small in the context of the Budget, but it is important to many individual taxpayers. Too often I find tax inspectors building up cases against taxpayers even when they have nothing to go on except surmise. Then their inquiries drag on until the person on the receiving end, unfortunately, becomes quite ill through sheer worry, although he or she has really nothing to worry about.

In my opinion, the Chancellor of the Exchequer should ensure that taxpayers do not do this kind of thing. Once tax inspectors commence such inquiries, they should be compelled to conclude them very quickly one way or another. To my mind, it is quite deplorable that they should unnecessarily prolong the agony. In saying this, I am speaking on behalf of a large number of honest taxpayers who have frequently experienced this tax persecution. It is grossly unfair to the individuals concerned.