HC Deb 06 July 1983 vol 45 cc93-4W
Mr. McTaggart

asked the Chancellor of the Exchequer if he will estimate how much would have to be added to the standard rate of income tax to compensate for (a) the abolition of all rates and (b) the abolition of domestic rates only.

Mr. Ridley

[pursuant to his reply, 30 June 1983, c. 127]: An increase of 14p in the basic rate of income tax would, at 1983–84 levels of income, yield an equivalent amount of revenue to the yield of rates, net of rate rebates. The corresponding figure for domestic rates alone would be 6p. These figures do not take into account any changes in the yields of other taxes which might result if such a switch in taxation were made and should therefore be regarded as purely illustrative.

Mr. McTaggart

asked the Chancellor of the Exchequer what proportion of a wage earner's gross pay has been taken by rates in each of the last five years for which figures are available for (a) someone on average earnings, (b) someone on half average earnings and (c) someone on three times average earnings.

Mr. Peter Rees

[pursuant to the reply, 30 June 1983, c. 127]: The following figures are derived from family expenditure survey data, and give estimated average rates payments, net of rebates, for non-pensioner households in England and Wales in the ranges of income of (a) ½ to ¾ times (b) around average and (c) over twice average male earnings.

percentage of gross pay
(a) (b) (c)
1980–81 3.5 2.5 1.4
1981–82 4.0 2.9 1.6
1982–83 4.1 3.0 1.6
1983–84 4.3 3.0 1.7


Limitations of sample size prevent estimation for the precise incomes requested, and information is given for only four years as earlier data is not readily available. Rate payments also vary widely among households with similar incomes.