HC Deb 23 February 1977 vol 926 cc633-4W
Mr. Ralph Howell

asked the Chancellor of the Exchequer what is his latest estimate of the total value of fiscal drag during the current fiscal year.

Mr. Robert Sheldon

Total fiscal drag can be defined as the difference between the actual yield of a tax and what would have been raised if the average base rate had remained unchanged; that is, if the tax receipts had grown in line with money incomes only. Inland Revenue's latest estimate of the total value of fiscal drag in the income tax system during the fiscal year 1976–77 compared with 1975–76 is about £100 million. Before the tax changes announced in the 1976 spring Budget total fiscal drag would have been about £1,400 million; the Budget reduced this by £1,300 million.

Forward to