§ 3. Mr. Geoffrey Johnson Smithasked the Chancellor of the Exchequer what would be the cost to the Exchequer of allowing the first £5,000 of investment income of people over 65 years to be treated for taxation purposes as if it were a pension.
§ The Chief Secretary to the Treasury (Mr. Len Brittan)The first £5,500 of anybody's investment income, regardless of age, is already treated in the same way as a pension or any other kind of earned income. The cost of adding an extra £5,000, for those over 65, to the existing investment income surcharge threshold of £5,500 would be about £110 million in a full year.
§ Mr. Johnson SmithI am grateful to my right hon. and learned Friend for that reply. Will he continue to bear in mind the needs of those whose income, when they are over 65, comes not from inheritance or from pensions, but from their savings? Will he acknowledge that there is a special need to index the rate of taxation?
§ Mr. BrittanThe investment income surcharge requires consideration constantly. For that reason, for the reason given by my hon. Friend, and for many other reasons, the threshold for the elderly was doubled in 1979 from £2,500 to £5,000.