§ Mr. Gordon PrenticeTo ask the Chancellor of the Exchequer what policy consideration led him to raise the threshold for earnings liable to 40 per cent. income tax by an amount less than the average growth of earnings; and if he will make a statement. [116879]
§ Dawn PrimaroloIn 2000–01, the basic rate limit, above which the higher rate of income tax of 40 per cent. is payable on earnings, rises to £28,400 in accordance490W with the provisions of Section 1 of the Income and Corporation Taxes Act 1988. The legislation provides that, unless Parliament determines otherwise, the basic rate limit for a year should be increased in line with the rise in the Retail Prices Index in the year ended in September in the previous year of assessment, rounded up to the nearest £100.