Income Tax

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 23 May 1972.

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Mr. Edward Taylor:

asked the Chancellor of the Exchequer how much income tax he estimates will be paid by a married man with two young children and earning £30 per week in 1972–73; and what were the comparable figures three and six years previously.

Photo of Mr Anthony Barber Mr Anthony Barber , Altrincham and Sale

In 1966–67, a married man with two young children would have paid £4·39 tax on weekly earnings of £30. In 1969–70, he would have paid £4·88. This year, his weekly tax bill will be cut to £2·84.

Mr. Taylor:

Do not these splendid figures show a dramatic transformation compared with the previous situation? Will my right hon. Friend confirm that it is still the Government's policy to continue to reduce the burden of income tax?

Photo of Mr Anthony Barber Mr Anthony Barber , Altrincham and Sale

Yes, Sir. We said that we would cut taxation, and that is just what we have done.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

Is the right hon. Gentleman aware that, contrary to the statement of the Chief Secretary earlier, the purchasing power of this wage has been cut by over 10 per cent. since the Government took office and that, therefore, there has been a net increase in the loss of purchasing power caused by prices and taxes combined since the Government took office?

Photo of Mr Anthony Barber Mr Anthony Barber , Altrincham and Sale

The right hon. Gentleman is somewhat muddled. If he wishes to have the figures, I will give them. In terms of real disposable income per head, which is the best measurement of the standard of living and which takes account both of increases in the cost of living and taxation changes, between 1964 and 1970 the standard of living rose at an annual rate of 1½ per cent. Between June, 1970 and the end of 1971, it was increasing at a rate of between 2 and 2⅔ per cent.