§ Mr. Matthew TaylorTo ask the Chancellor of the Exchequer (1) if he will estimate the gain in(a) cash terms and (b) percentage terms for each income decile of people of pension age from change in the level of the basic rate income tax introduced in April 2000; [151311]
(2) what estimate he has made of the (a) average and (b) median gain to pensioners from cutting the basic and lower rates of income tax on (i) savings income, (ii) dividends income, (iii) pension income, (iv) earnings income and (v) all other income to zero and if he will make a statement. [151313]
§ Miss Melanie JohnsonThe average (mean) gains to people over state retirement pension age from cutting the starting and basic rates of income tax in 2001–02 are given in the table. The median gains would be zero as some six to 10 pensioners pay no tax at all.
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For people of state retirement pension age, cutting basic and starting rates of tax to zero for income from: Average (mean) annual gains (£) (i) savings 118 (ii) dividends 22 (iii) pensions 333 (iv) earnings 76 (v) other 7 For people over state retirement pension age in 2001–02, estimates for the gains from a 1p cut in the basic rate of income tax by each income decile are shown in the table.
Decile Gain for each decile group (£ million) Percentage gain Lowest 0 0 2nd 0 0 3rd 0 0 4th 0 0 5th 0 0 6th 0 0 7th Neg 0.5 8th 15 8.5 9th 40 21 Highest 135 70 All 195 100 These estimates are based on the Survey of Personal Incomes and are consistent with the November 2000 pre-Budget report.