§ Mr. MeacherTo ask the Chancellor of the Exchequer what has been the gain or loss to those with incomes(a) under £5,000, (b) £5,000 to £10,000, (c) £10,000 to £15,000, (d) £15,000 to £20,000, (e) £20,000 to £30,000, (f) £30,000 to £50,000, (g) £50,000 to £70,000, (h) £70,000 to £100,000 and (i) over £100,000 a year as a result of each Finance Act since 1979, both in aggregate and per person on average in each of these income groups, in each case indicating how much is due to indexation and how much is real gain.
§ Mr. Norman Lamont[holding answer 13 January 1988]: The information is in the tables. For each financial year shown, the tables compare the yield from the tax regime in that year with the 1978–79 tax regime. All estimates are based on a provisional 1987–88 income base projected from the 1984–85 survey of personal incomes and all tax regimes have been indexed to 1987–88 levels by reference to the statutory formula. The comparisons therefore allow for budgetary changes in income tax rates and allowances, but not for any changes since 1978–79 in the definition of the income tax base.
The first table shows the total reduction (+) or increase ( - ) in tax yield from each income range; and the second table shows the average change for individual tax units. Because of the uncertainties of projecting for those with the highest incomes, taxpayers with incomes over £70,000 are shown in a single range.
As child tax allowances were being phased out in 1978–79 they have been excluded from the comparison.
It is not possible to provide useful estimates of the liabilities in 1987–88 for the 1978–79 regime without indexation since Inland Revenue records do not cover many of the people who would be brought into tax by such low levels of personal allowances. A partial analysis with incomplete coverage would be misleading.
81W
Range of total income in 1987–881 Number of units paying tax in 1987–88 £ (million) 1979–80 1980–81 1981–82 1982–83 1983–84 1984–85 1985–86 1986–87 1987–88 Over 70,000 0.06 970 940 850 860 910 1,060 1,070 1,080 1,090 Total 20.90 7,610 5,960 2,060 2,490 4,710 6,640 7,780 9,110 11,730
Average gain (+) Moss (-) per tax unit (£ per annum) Range of total income in 1987–881 £ 1979–80 1980–81 1981–82 1982–83 1983–84 1984–85 1985–86 1986–87 1987–88 Under 5,0002 60 25 -70 -60 -10 30 60 70 90 5,000 to 10,0002 150 90 -30 -20 50 100 140 180 250 10,000 to 15,000 270 190 40 50 140 220 280 350 490 15,000 to 20,000 400 300 120 140 240 350 420 520 740 20,000 to 30,000 750 620 250 290 510 690 770 930 1,250 30,000 to 50,000 2,000 1,750 1,000 1,090 1,520 1,920 2,030 2,230 2,570 50,000 to 70,000 5,590 5,130 3,790 3,930 4,700 5,640 5,790 5,920 6,150 Over 70,000 17,030 16,450 14,850 15,020 15,920 18,630 18,800 18,900 19,100 Total 350 270 90 110 220 300 360 420 540 1 All information is in terms of tax units-that is married couples are counted as one and their incomes combined. 2 Average gains and losses are calculated by reference to the estimated number who would be liable to pay tax under the indexed 1978–79 regime; this number is some 900,000 greater than the numbers paying tax in 1987–88, some 750,000 in the income range below £5,000 and 150,000 in the range £5,000 to £10,000.