§ Sir Ian GilmourTo ask the Chancellor of the Exchequer if he will set out figures showing his estimates of:(a) how many families with children have lost more as a result of increased interest rates than they gained as a result of the Budget tax cuts, (b) the amounts by which they are worse off and (c) the income groups worst affected.
§ Mr. Lawson[holding answer 29 November 1988]: I regret the delay in replying.
Out of some 6.9 million families with children, the number whose income tax and mortgage interest payments during 1988–89 are likely to exceed the payments which would have been made if the tax rates, allowances and average mortgage interest rates in force in 1987–88 had applied is estimated to be about 570,000. The table shows a breakdown by total income and also the average difference in tax and interest payments.
Total income £ Number of families with children paying more in tax and interest at 1988–89 rates1 (thousands) Average extra payment £ Up to £5,000 225 85 £5,000 to £10,000 220 100 Over £10,000 125 60 TOTAL 570 85 1 Assumes that current mortgage rates remain unchanged for the rest of the financial year. Most of these 570,000 families are likely to be in receipt of a pay increase which comfortably exceeds the extra payment that they will make, quite apart from any extra income from higher interest on savings.