§ Mr. Peter Reesasked the Chancellor of the Exchequer what would be the cost of adjusting current personal reliefs for income tax to their value in 1970, 1965, 1960, 1955 and 1950, respectively, taking into account the diminution of the value of the pound.
§ Mr. Robert Sheldon,pursuant to his reply [OFFICIAL REPORT, 6th December 1974 ; Vol. 882, c. 671.], gave the following information :
For the main personal reliefs—the single, married, and child allowances— the current cost of the reliefs in aggregate is greater than in any of the years referred to, even after taking account of changes in money values.
For the main reliefs individually, the cost of increasing 1974–75 allowances to the required equivalent levels in those
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§ Dr. Gilbert,pursuant to his reply [OFFICIAL REPORT, 6th December 1974; Vol. 882, c. 671.], gave the following information:
The following table shows to the nearest £100 the levels at which the effective average rate of duty specified in the left-hand column is attained, given the scale of rates proposed in the November 1974 Budget, and the present equivalent in terms of 1974 prices of the corresponding levels in previous years:
cases where the current cost is less than the price-adjusted cost is as follows:
Allowance Year Cost £ million Child … … 1955–56 270 Child … … 1960–61 225 Child … … 1965–66 170 Married … … 1970–71 45 In these calculations the effect of earned income relief in years before the introduction of the unified system of personal taxation has been taken into account, but changes in family allowances and in clawback have been ignored. The adjustment to current year's prices has been made using the ratio of the purchasing power of the pound at April of the year in question to that at April 1974.
The minor personal reliefs have been ignored in order not to make the calculations unduly complicated.