§ Mr. Pardoeasked the Chancellor of the Exchequer what additional revenue would be obtained in a full year from the cancellation of the child tax allowances; what level of child benefit would be required to compensate the average family for such cancellation; and what such benefits would cost.
§ Mr. Robert Sheldon,pursuant to his reply [Official Report, 30th January 1978; Vol. 943, c. 31], gave the following information:
If child tax allowances were withdrawn for 1977–78 and the other personal allowances remained at their present level, the additional revenue would be of the order of £900 million at 1977–78 income levels.
Taking the average family to be a married couple with two children under 11 years old paying income tax at the basic rate, child benefit for each child would have to be raised by £1.20 to £2.20 for the first child and £2.70 for the second. The cost of the increase in benefit would be about £720 million.