HC Deb 06 April 1998 vol 310 cc36-7W
Mr. Malcolm Bruce

To ask the Chancellor of the Exchequer if he will update Table 3.3 on page 48 of the Red Book to include the numbers of people affected by high marginal deduction rates of 50 per cent. or more. [36444]

Dawn Primarolo

[holding answer 30 March 1998]: I refer the hon. Member to the reply I gave to the hon. Members for Havant (Mr. Willetts) and for Chingford and Woodford Green (Mr. Duncan Smith) and the right hon. Member for Wells (Mr. Heathcoat-Amory) on 31 March 1998, Official Report, columns447–48.

Mr. Malcolm Bruce

To ask the Chancellor of the Exchequer, pursuant to 1.2.1 on page 10 of the Red Book, for what reasons higher tax revenues in 1997–98 are not assumed to carry forward fully into future years. [36450]

Dawn Primarolo

[holding answer 30 March 1998]: Table B 10 of the March 1998 FSBR shows changes in the forecasts of tax receipts between the July 1997 and March 1998 Budgets. Receipts from income tax, corporation tax, VAT and social security contributions are all likely to be higher in 19977–98 than forecast last July. In the case of income tax, VAT and social security contributions, these higher receipts do carry through to higher forecasts of receipts for 1998–99. However, the forecast for non-oil corporation tax receipts has been revised down by £2.2 billion in 1998–99, mainly because of a much lower than expected outturn for company profits in 1997, and the forecast of North Sea revenues has been revised down by £0.8 billion in 1998–99, because of lower oil prices.

Mr. Willetts

To ask the Chancellor of the Exchequer if he will provide a revised version of the information in Table 3.3 of the Red Book separately identifying the marginal rates of each individual in a two-earner couple. [35864]

Dawn Primarolo

[holding answer 23 March 1998]: The information requested is contained in the table. It shows that the number of people facing very high marginal tax rates has been significantly reduced. The number facing marginal rates above 70% has been reduced by about two thirds, including the effect on both partners within a couple.

Before After
Heads Spouse Heads Spouse
100 per cent. or more 5 5 0 0
90 per cent. or more 130 60 20 10
80 per cent. or more 300 150 200 100
70 per cent. or more 740 400 260 110
60 per cent. or more 760 420 1,010 240

Figures are for families where at least one partner works 16 hours or more, and are based on 1997–98 caseload and take-up rates. Figures are based on Family Expenditure Survey data.

Figures in the table do not reflect the NICs reforms which reduce the high marginal rates for those just below the Lower Earnings Limit.

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