§ Mr. Pardoeasked the Chancellor of the Exchequer what would be the cost for a full year at 1977 prices of a reduced rate tax level of 25 per cent. on the first £1,000, £1,500, £2,000, £3,000, £4,000 of taxable income; and what would be the cost in each case of reducing the standard rate of income tax to 30 per cent. on the remainder of the present standard rate band.
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 8th November 1977; Vol. 938, c. 78], gave the following information:
92Wnational insurance contributions, respectively, and in total, by a single man and by a married man with two children under 11 years, each having average earnings in 1973–74, 1976–77 and 1977–78, on a basis comparable with Written Answer, Official Report, 16th December 1975, column 565.
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 8th November 1977; Vol. 938, c. 78], gave the following information:
The figures so far as available are as follows:
The costs are as indicated in the following table:
Estimated cost in 1977–78 Width of reduced rate band at 25 per cent. £ Reduced rate £m. Basic rate at 30 per cent on balance £m. 1,000 … … 1,900 900–1,200 1,500 … … 2,600 500–900 2,000 … … 3,100 300–700 3,000 … … 3,700 100–300 4,000 … … 4,000 0–200 The costings take account of the proposed changes to allowances in the Chancellor's statement of 26th October and assume that a married woman is entitled to a separate reduced rate band against her earnings.
The cost of reducing the basic rate of 30 per cent. depends for married couples on the relative income of the husband and earnings of the wife. The maximum figure shown would apply if no wife had taxable earnings and the minimum figure if all wives' earnings exceeded the reduced rate band.