§ Mr. Austin Mitchell
asked the Chancellor of the Exchequer, further to his reply dated 4 December, Official Report, c. 236, to the hon. Member for Grimsby concerning the indexation of tax allowances, whether he will publish in the Official Report (a) a table of allowances in each year as a percentage of the previous year and as a percentage of the base year, and (b) a table showing the cost to the Exchequer of increasing each of the specified allowances to take account of (i) inflation in the last accounting period and (ii) the anticipated cost taking account of the rate of inflation in the current accounting period.
§ Mr. Ridley
[pursuant to his reply, 21 December 1981, c. 306]: In my hon. Friend's reply of 4 December, the percentage increase in allowances, basic and higher rate band widths and the investment income surcharge thresholds from the values specified in sections 22(1) and 17 of the Finance Act 1977 were taken as:
Percentage increase on previous year Percentage increase on base year 1977–78 1978–79 11.0 11.0 1979–80 8.9 20.9 1980–81 17.8 42.4 1981–82 15.1 63.9
The resulting value of allowances and bands are shown in the following table, together with the cost or yield of changing each item from its current level to that value in a full year at 1981–82 income levels.
Value of allowances or bands, revalorised from Finance Act 1977levels £ Full year cost(−)/yield (+) of changing from current levels† £ million at 1981–82 income levels Single and wife's earned income allowance 1,385 −40
Items from Central Government Accounts £ million 1978–79 1979–80 1980–81 *1981–82 (a) Receipts from taxes on income, expenditure and capital; national insurance etc. contributions 52,792 65,929 77,377 89,769 (b) Central government borrowing requirement 8,084 8,227 12,956 11,497 (c) Current account balance† −2,801 −756 −4,011 −1,605 percentage change on previous year (a) +25 +17 +16 (b) +2 +57 −11 (c)‡ +73 −430 +60 *FBR 1981 forecast. † Surplus(+), deficit(−). ‡ Smaller deficit(+), larger deficit(−9.
Financial Statement and Budget;Report 1981–82 Table 15 and Financial Statistics Tables 3.6 and 3.7.