HC Deb 12 May 1989 vol 152 cc553-4W
Mr. Simon Hughes

To ask the Chancellor of the Exchequer if he will specify the distribution of gains in the Budget from each item where (a) tax or (b) national insurance changes were made other than normal indexation, according to income bands as follows: less than £5,000 per year, £5,000 to £7,500, £7,500 to £10,000, £10,000 to £12,500, £12,500 to £15,000, £15,000 to £20,000, £20,000 to £30,000, £30,000 to £50,000 and above £50,000; and if he will indicate the percentage of total (a) tax and (b) national insurance changes accruing to each group and the percentage of the total numbers of (a) taxpayers and (b) national insurance that each group comprises.

Mr. Norman Lamont

[holding answer 2 May 1989]: The changes in income tax rates and allowances other than those for indexation are the changes to age allowances and withdrawal rate. They will cost about £15 million in 1989–90. About 15 per cent. of this cost will go to taxpayers with income less than £5,000; about half to those with incomes between £5,000 and £10,000 and the rest to those with incomes between £10,000 and £14,000. The total number of taxpayers who will benefit is about half a million; about 2 per cent. of all taxpayers. Further information is not available.

The required information for national insurance contribution in the year 1990–91 (the first full year of the proposed NICs structure) is estimated to be as follows:

Distribution of NICs gains and gainers in 1990–91
Earnings1 £000s Gains £ billion Gains per cent. Numbers2per cent.
<5.0 0.15 5 13
5– 7.5 0.30 11 14
7.5–10.0 0.55 20 17
10.0–12.5 0.50 18 16
12.5.15.0 0.40 15 13
15.0–20.0 0.50 18 15
20.0–30.0 0.30 10 9
30–0.40.0 0.05 1.5 1.5
40.0+ 0.05 1.5 1.5
Total 2.80 100 100
1 Earners with weekly earners below the weekly lower earnings limit assumed for 1990–91 are ignored. Insufficient information is available on those earning £50,000 and above and so the table shows figures for £40,000 and above.
2 Numbers are of national insurance class 1 standard rate contributors earning in excess of the lower earnings limit.