§ Mr. Ralph Howellasked the Chancellor of the Exchequer what loss of revenue would result, and what compensatory increase in the standard rate of VAT would be necessary, if the bands of taxable income were altered to make tax payable at the following rates: £–0£1,000 at 15 per cent., £1,000–£2,000 at 20 per cent.,£2,000–£3,000 at 25 per cent., £3,000–£4,000 at 30 per cent., £4,000–£5,000 at 35 per cent., £5,000–£6,000 at 40 per cent., £6,000–£7,000 at 45 per cent. and over £7,000 at 50 per cent.
§ Mr. Robert SheldonThe loss of revenue that would result from the proposed changes in income tax is estimated at about £7,000 million at 1976–77 levels of income and allowances. In order to raise an additional £7,000 million, the standard rate of VAT would need to be increased to 31 per cent., but an increase of this size would cause such substantial changes in the economy that any estimate
[£ per week At current prices At 1976 prices 1938 1946 1976 1938 1946 (a) One-child family 50 per cent. of average earnings … … … — — 2.02 — — 100 per cent. of average earnings … … … — 0.27 2.02 — 1.42 150 per cent. of average earnings … … … 0.06 0.43 2.02 0.51 2.31 200 per cent. of average earnings … … … 0.10 0.43 2.49 0.87 2.31
At current prices At 1976 prices 1938 1946 1976 1938 1946 (b) Two-child family 50 per cent. of average earnings … … … — 0.17 4.66 — 0.90 100 per cent. of average earnings … … … — 0.56 4.66 — 2.97 150 per cent. of average earnings … … … 0.06 0.97 4.66 0.51 5.17 200 per cent. of average earnings … … … 0.17 0.97 5.29 1.55 5.17 300 per cent. of average earnings … … … 0.62 0.97 6.92 5.58 5.17