§ Mr. Chris SmithTo ask the Chancellor of the Exchequer how much it would cost to restrict(a) personal tax allowances, (b) age allowance, (c) mortgage interest tax relief and (d) tax relief for occupational and private pensions to the basic rate in 1990–91 and in a full year.
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§ Mr. Lilley[holding answer 12 February 1990]: Estimates of the direct revenue yield in a full year at 1990–91 levels of income from restricting the main income tax reliefs and allowances to the basic rate are as follows:
£ million Personal allowances 1,100 Age allowances nil Retirement annuity relief1 100 1 Including relief for retirement annuity payment made by employees. It would be premature to provide an estimate for mortgage interest relief, since the cost will depend on the amounts of mortgage lending and level of interest rates. Similarly, the estimate for employees' superannuation and personal pension contributions would depend on take-up.
Estimates are based on a projection of the 1987–88 survey of personal incomes and are provisional. The estimates allow for the introduction of independent taxation and assume that the tax regime for 1989–90 has been indexed to 1990–91 in accordance with the rules for statutory indexation.