HC Deb 26 March 1971 vol 814 cc228-30W
Mr. David Mitchell

asked the Chancellor of the Exchequer, on the basis that the standard rate of income tax were stated in terms of earned income, what would be the present rate expressed as a percentage; and what would be the same figure taking account of the proposals announced in the autumn Budget.

Mr. Patrick Jenkin

For 1970–71 the rate of income tax chargeable on earned income not exceeding £4,005 would be 32.08 per cent., seven-ninths of 41.25 per cent. For 1971–72 the corresponding rate would be 30.14 per cent., seven-ninths of 38.75 per cent.

Mr. David Mitchell

asked the Chancellor of the Exchequer what would be the estimated cost to the Exchequer of abolishing the extra charge to income tax of income obtained from savings.

Mr. Patrick Jenkin

I am not sure that I understand what my hon. Friend has in mind. But to extend the existing earned income reliefs to all forms of income up to the relevant levels for those reliefs would cost about £250 million for a full year.

Mr. David Mitchell

asked the Chancellor of the Exchequer what would be the estimated cost to the Exchequer of abolishing the extra charge to income tax on income obtained from savings and reducing the resultant combined standard rate by 2½p or by 5p.

Mr. Patrick Jenkin

I am not sure what my hon. Friend has in mind; but if the earned income reliefs were applied to all kinds of income at present not ranking for those reliefs, the estimated costs are about £650 million for a reduction of 2½p and about £1,050 million for a reduction of 5p.

Mr. David Mitchell

asked the Chancellor of the Exchequer what would be the estimated cost to the Exchequer of abolishing the extra charge to income

RATE OF CHANGE IN PRICE INDICES FOR CONSUMERS NOVEMBER TO NOVEMBER
Per cent. per annum
1969–70 1968–69 1967–68 1966–67 1965–66
United Kingdom 7.9 5.4 5.2 1.9 4.1
European Economic Community
Belgium 3.3 4.3 2.3 3.5 3.4
France 5.5 5.8 5.2 3.6 2.7
Germany 4.1 2.7 2.7 0.6 2.5
Italy 5.3 4.1 0.7 3.8 2.3
Luxembourg 5.2 2.1 2.0 3.2 2.7
Netherlands 5.7 6.9 4.9 3.4 4.7
European Free Trade Association
Austria 4.8 2.8 3.2 3.8 2.4
Denmark 7.6* 4.5 4.5 10.3* 6.5*
Finland 2.9 1.7 6.0 7.3 4.4
Norway 12.1 3.1 3.3 4.3 4.8
Portugal 3.8 10.5 4.8 7.7 4.1
Sweden 8.1 3.9 1.5 3.4 5.5
Switzerland 5.4 2.2 2.2 3.7 3.7
United States of America 5.6 5.7 4.8 2.8 3.6
Australia 3.8† 2.8‡ 2.7‡ 3.2‡ 1.7‡
Canada 2.3 4.6 4.2 3.7 3.6
New Zealand 5.8† 3.9‡ 5.1‡ 6.6‡ 1.7‡
Source: United Nations Monthly Bulletin of Statistics, Table 60.
* Rate of change, October to October.
† Rate of change, 3rd quarter average 1969 to 3rd quarter 1970.
‡ Rate of change, 4th quarter average to 4th quarter each year.—[Vol. 814, Col. 41–42.]

tax on income derived from savings and reducing the consequent standard rate to 30 per cent., to 27½ per cent., and to 25 per cent., respectively.

Mr. Patrick Jenkin

I am not sure what my hon. Friend has in mind but if my replies to his earlier Questions do not cover his point perhaps he would write to me.

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