§ Mr. Lawson
asked the Chancellor of the Exchequer if he will publish the text of the Financial Secretary's letter of 5th July to the hon. Member for Blaby on the subject of the P 11 D limit.706W
§ Mr. Robert Sheldon
I wrote to the hon. Member as followsDuring Standing Committee's consideration of Clause 32 of the Finance Bill on 21st June you asked two questions about the P 11 D limit.First you asked what was the relationship of the limit at various times to average earnings. The Inland Revenue tell me that on the information available to them an exact comparison between 1948 and the last few years is not possible but in broad terms the figure of £2,000 was about five times average earnings in 1948 and the increased figure of £5,000 in 1974 was about twice average earnings, reducing to rather less than one and a half times now. Secondly you asked how many people were within the P 11 D limit. Again it is not possible to arrive at an accurate figure (apart from anything else returns are not made until the end of the tax year) but the Inland Revenue estimate the figure at between two and a half and three million, which would be about half a million more than last year.I hope that this covers the points you raised. I am sending a copy of this letter to David Howell and Jeff Rooker who also asked questions on this subject.