HC Deb 06 April 1970 vol 799 cc15-6W
Mr. Gwynfor Evans

asked the Chancellor of the Exchequer what is his estimate of the effect on the revenue of replacing the lower rate and standard rate of income tax by a new blanket standard rate of 6s. in the £ sterling, while at the same time abolishing the earned income allowance of two-ninths, and increasing the earned income allowance to 33⅓ per cent. for all incomes up to £3,000 per annum, respectively.

Mr. Taverne

To couple the suggested single rate of 6s. with an earned income relief of one-third up to £3,000 in place of the present arrangements would cost something of the order of £1,000 million.

Mr. Gwynfor Evans

asked the Chancellor of the Exchequer what is his estimate of the annual loss or gain to the revenue of reducing the standard rate of income tax by 1s., reducing the rate of surtax by 1s. in the £ sterling, lowering the level at which surtax should be paid from £5,000 per annum to £4,000 per annum and to £3,000 per annum, respectively, and of increasing the rate of surtax by 1s. in the £ sterling on all incomes in excess of £8,000 per annum, respectively.

Mr. Taverne

I am not sure what the hon. Member has in mind but to reduce the standard rate of income tax and all surtax rates by 1s. and at the same time reduce the maximum surtax earnings allowance so that a single person whose income is wholly earned would pay surtax on earnings exceeding (a) £4,000 per annum and (b) £3,000 per annum (instead of £5,000 per annum as at present) would cost (a) about £400 million and (b) about £365 million.

To increase by 1s. the rates of surtax on the excess of surtaxable incomes over £8,000 would yield about £15 million.