Charge of Income Tax For1983–84

Part of Clause 12 – in the House of Commons at 5:45 pm on 25 April 1983.

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Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart 5:45, 25 April 1983

My hon. Friend the Member for Workington (Mr Campbell-Savours) anticipated my next point.

The issue to which we must address ourselves is, "Who will pay higher taxation?" If the burden of taxation is to be increased, we must increase direct, not indirect, taxation. Conservative Members and their friends may think that they bear the burden of direct taxation, but the fact is that direct taxation is always fairer. Indirect taxation, as a percentage of income, means that the poorer contribute the most taxation to the state. If the burden of direct taxation is increased, the better off will pay.

We must ensure that personal allowances increase much more dramatically so that we take many more people out of taxation. We shall then be able to introduce increases in taxation rates to raise the money that we require. The extra taxation must come from the top, not the bottom, of the earnings scale.

If there is a 3 per cent. or 4 per cent. increase in taxation for those earning £10,000 a year and more, all hon. Members will be included. Our incomes may not be so high—many may think that they should be higher—but we are in the top 5 per cent. to 10 per cent. of salary earners. That is certainly so if our allowances are taken into consideration. However, we do not come anywhere near paying more than the basic rate of taxation. I do not believe that to be right when we are receiving an income of about £14,500 a year. I think that we should pay more in taxation. We are among the better off in society. We receive an income which allows us to lead a reasonably privileged life. We have more privileges than most of our constituents—certainly most of mine. I state publicly—I shall do so in the election campaign when that comes in May of next year—that I am prepared to pay more taxation if that means that others who are unemployed or low paid will get a better deal in society. That is what creates a Socialist society and that is what it is all about.

My right hon. Friend the Member for Battersea, North said that the Government's taxation policy is morally and economically wrong. It does not solve our economic problems. The experiment of giving more to the better off has shown that it creates the investment that Britain desperately requires. It is a policy that does not increase the level of demand in our society. If more is given to those at the bottom end of the earnings scale, there will be expenditure within local economies. This will be beneficial to small shopkeepers and will help to ensure the survival of services that are desperately needed.

British industry will benefit most from the policy of giving more to the least well off. If more is given to the wealthy or the better off, they will invest it abroad or buy luxury items that are of little value to them or anyone else. If we invest at the bottom end of society, the money will be spread evenly throughout the country and new jobs will be created in each locality. There is an old saying that money is like dung. In a heap it simply stinks, but if it is spread out evenly over the fields it brings forth fruit.