§ Mr. McNamaraasked the Chancellor of the Exchequer if he will publish in the OFFICIAL REPORT the figures on which he bases his calculation that the proposal to abolish Income Tax and Surtax allowances for children, together with other benefits such as school meals, and their replacement by a standard family allowance of 25s. for the first child and £1 each for other children in the family would yield a substantial net saving to the Exchequer; and if he will show precisely the increased costs and savings.
§ Mr. CallaghanAssuming that my hon. Friend's proposal is to replace the existing family allowances by taxable family allowances of 25s. 0d. a week for the first child and £.1 a week for subsequent children, the estimated figures for the United Kingdom for 1966–67 are given below:
£ million Yield from abolishing child allowances for Income Tax and Surtax 580 Savings on school meals, milk, etc. 110 690 Cost of increasing family allowances, net of savings in National Insurance and non-contributory benefits 600 Less additional tax yield on the increased family allowances 170 430 Net saving to Exchequer for the full year 260