HC Deb 09 June 1976 vol 912 c690W
Mr. Kilroy-Silk

asked the Chancellor of the Exchequer what would be: (a) the increase in the borrowing requirement and (b) the loss to the Exchequer if the top rate of tax on earned income were cut to 60 per cent.

Mr. Robert Sheldon

On the arbitrary assumption that earned income forms the lower slice of any taxed income and that investment income continues to be taxed at the rates proposed for 1976–77, the estimated tax cost, and the corresponding increase in the public sector borrowing requirement, would be about £85 million in the first year and £120 million in a full year.

These figures do not take account of the effect of the proposed change on the general level of economic activity.