§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer whether he will publish in theOfficial Report his estimate of the cost to the Exchequer of an increase of £100 in each of the allowances and reliefs for income tax at 1988–89 income and tax levels; and if he will provide corresponding figures on the basis of the proposed 1990 regime for the independent taxation of husbands and wives.
§ Mr. Norman Lamont[holding answer 29 July 1988]: Provisional estimates for the main income tax allowances based on a projection of the 1985–86 survey of personal incomes are in the table. Estimates for increases in allowances under independent taxation are available only at 1990–91 income levels.
Direct revenue cost of increasing allowances by £100 in a full year £ million Allowance at 1988–89 incomes Single and wives earned income 340 Married man's2 265 Additional personal and widow's bereavement 15 Single age 25 Married age2 20
930W
Allowance at 1990–91 incomes with Independent Taxation1 Personal allowances:— single and wives 340 husbands2 270 Additional personal and widow's bereavement 15 Aged personal single and wives 30 husbands2 25 1 Assuming allowances are indexed from 1988–89 to 1990–91. 2 To provide an appropriate comparison between the present system of allowances and Independent Taxation, the personal allowances under Independent Taxation are shown separately for single people and wives and for husbands. If the married couple's allowance were also increased by £100, it would cost approximately a further £270 million for the non-aged and £25 million for the aged.
Note:
The additional personal and widow's bereavement allowances are defined under present legislation as the difference between the married allowance and the single allowance. It follows that all the allowances could not be increased by £100 at the same time.