§ Mr. Gordon Walker
asked the Chancellor of the Exchequer the estimated cost in tax relief to the Exchequer of the child allowance for the year 1956–57, the child allowance for the year 1958–59, both on the basis of the allowance in 1956–57, and on the basis of the increased allowances now in force, the dependant's allowance of £60 for elderly or infirm relatives in 1956–57, and a dependant's allowance of £60 for elderly or infirm relatives in 1958–59.100W
The present membership of these scheme is probably about 10 million including over 1 million pensioners. The corresponding number in industry and commerce generally, including the nationalised industries, is about 7 million.
Any estimate of the current cost of these tax reliefs is necessarily speculative as it must take into account not only the relief on the total contributions paid and the investment income of the funds, but also the tax yield from pensions now in payment. However it is thought that at present and in 1958–59 the annual cost to the Revenue is of the order of £100 million.
In 1956–57 the Income Tax cost of the child allowance was about £240 million and it would have been about £16 million more on the basis of the child allowance now in force; in 1958–59 the cost would be about £320 million—including Surtax—on the basis of the child allowance now in force and would be about £19 million less on the basis of the 1956–57 child allowance. The dependent relative allowance cost about £22½ million in 1956–57 and would cost about £27½ million in 1958–59 on the basis of the present allowance.