HC Deb 24 January 1973 vol 849 cc187-8W
Mr. Meacher

asked the Chancellor of the Exchequer by how much the cost of the tax credit system, as outlined in the Green Paper, would be reduced by introducing the higher income tax rates at incomes above £3,000 per year as follows: on £3,000-£4,000 at 35 per cent., on £4,000-£5,000 at 40 per cent., on £5,000-£6,000 at 50 per cent., on £6,000£8,000 at 60 per cent., on £8,000-£10,000 at 63 per cent., on £10,000-£15,000 at 67.5 per cent., and on £15,000 and above at 75 per cent.

Mr. Nott

On the basis of 1972–73 incomes, an increase in the higher rates of tax as proposed would yield about £300 million.

Mr. Meacher

asked the Chancellor of the Exchequer whether the estimated £1,300 million cost of the tax credits proposals takes into account the savings arising from the replacement of means-tested benefits by credits for many low income families; and what is estimated to be the annual saving regarding means-tested benefits paid, respectively, to families with dependent children and to retirement pensioners.

Mr. Nott

The estimated cost of £1,300 million allows for a saving of about £250 million in FIS and supplementary benefits of which about £20 million will come from families with dependent children and about £200 million from retirement pensioners.

Mr. Meacher

asked the Chancellor of the Exchequer how much of the £150 million per year estimated to accrue as a net gain to households with income under £20 a week under the tax credits proposals will be received by, respectively, retirement pensioners and non-pensioner households with respectively, no dependent children, one child, two children, three children, four children and five or more children.

Mr. Nott

The estimates are:

£ million
Retirement pensioners 80
Others—
No children 20
1 child 22
2 children 15
3 children 12
4 or more children 1
Total 150

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