§ Mr. Austin Mitchellasked the Chancellor of the Exchequer whether he will publish in the Official Report a table showing the estimated gross cost of raising child benefit to £15 per week in 1983–84 and the net cost if the benefit were to be taxed on current policies; how this compares with the estimated cost of the benefit in 1983–84 on current policies; and what the net cost of the benefit of £15 per child would be if the single and married income tax allowances were raised to £1,800 and £3,500, respectively, two reduced rate bands of £1,000 were introduced at rates of 10 per cent. and 20 per cent., and the standard rate band was introduced to £4,000 followed 434W by two bands of £4,000 and four bands of £5,000 in incremental steps of five per cent. to a maximum of 65 per cent.
§ Mr. RidleyIt is estimated—Cmnd. 8789—that child benefit will cost £3.9 billion in 1983–84. The additional gross cost, in a full year, if child benefit were raised from its present level of £5.85 to £15 per week would be about £6 billion. This estimate does not include savings that would arise on other social security benefits. If child benefit payments of £15 per week were treated as part of the taxable income of the parents, there would be a gross yield of about £2¾ billion in a full year at 1983–84 income levels assuming that tax allowances and thresholds were indexed from 1982–83 levels by reference to the statutory formula.
If the regime described in the second part of the question were introduced there would be a revenue cost in a full year of about £8¼ billion at 1983–84 levels of income. If, in addition, child benefit payments of £15 per week were taxable, there would be an offsetting yield of about £2½ billion.
These estimates take no account of the increased administrative costs involved both to the Revenue and to taxpayers.