§ Mr. Knoxasked the Chancellor of the Exchequer, in terms of an increase in income tax, what would be the cost of giving each central Government employee a flat-rate increase of £6 per week, excluding those who would be ineligible for such an increase under the rule; and what would be the cost on a per capita and on a per family basis.
§ Mr. Joel BarnettThe direct addition to the central Government wage and salary bill if each eligible central Government employee were given a flat rate increase of £6 a week would be of the order of £650 million in a full year. Allowing for consequential deductions from income at source the net cost would be about £400 million. This is roughly equivalent to the yield of 1p on all rates of income tax. The tax liability incurred as a result depends on the particular circumstances of individual taxpayers.
654WThe net cost can be alternatively expressed as about 14p for every individual, or 40p for every household in the United Kingdom.