Income Tax (Hansard, 13 April 1978)

§ Mr. Ian Stewart
asked the Chancellor of the Exchequer whether, on the basis of 1978–79 figures and proposed tax rates when they are published, he will estimate the revenue cost of cutting the basic rate of tax to 30 per cent. restoring the main personal allowances to their real equivalent value of April 1973 and restoring the higher rate tax bands to their real 507W equivalent values of April 1973; and if he will indicate the cost of introducing all three changes simultaneously.

§ Mr. Robert Sheldon,
pursuant to his reply [Official Report, 12th April 1978], gave the following information:
At 1978–79 income levels and on the basis of the personal allowances and rates of tax proposed in the Budget Statement, the estimated cost of the changes for 1978–79 would be as follows:

£ million

Reduction of basic rate to 30 per cent. and elimination of lower rate band 640

Restoration of real value of main personal allowances by reference to April 1973 values 1,250^*

Restoring higher rate bands to real equivalent values of April 1973 600^*

Simultaneous introduction of all of above 2,450

^* On the basis that the main personal allowances and rate bands were to be increased by reference to the change in the retail price index between April 1973 and February 1978—the latest available.

§ Mr. Ian Stewart
asked the Chancellor of the Exchequer whether, on the basis of 1978–79 revenue estimates when they are published, he will indicate the revenue cost of reducing the top rate of income tax on earned income to 50 per cent. and on investment income to 65 per cent.

§ Mr. Robert Sheldon,
pursuant to his reply [Official Report, 12th April 1978], gave the following information:
To make the top marginal rate of tax 50 per cent. whilst retaining the additional rates on investment income would cost about £520 million for a full year. This estimate is based on the personal allowances and income tax rates proposed in the Budget Statement and on 1978–79 income levels.

§ Mr. Ian Stewart
asked the Chancellor of the Exchequer whether, on the basis of 1978–79 revenue estimates when they are published, he will indicate the revenue cost of reducing the top rate of income tax on earned income to 60 per cent. and on investment income to 75 per cent.

§ Mr. Robert Sheldon,
pursuant to his reply [Official Report, 12th April 1978], gave the following information:
To make the top marginal rate of tax 60 per cent. whilst retaining the additional 508W rates on investment income would cost about £280 million for a full year. This estimate is based on the personal allowances and income tax rates proposed in the Budget Statement and on 1978–79 income levels.

§ Mr. Ian Stewart
asked the Chancellor of the Exchequer whether, when 1978–79 estimates have been published, he will state the amount of income tax expected to be raised per household during that year.

§ Mr. Robert Sheldon,
pursuant to his reply [Official Report, 12th April 1978], gave the following answer:
£961.

	£ million
Reduction of basic rate to 30 per cent. and elimination of lower rate band	640
Restoration of real value of main personal allowances by reference to April 1973 values	1,250^*
Restoring higher rate bands to real equivalent values of April 1973	600^*
Simultaneous introduction of all of above	2,450
^* On the basis that the main personal allowances and rate bands were to be increased by reference to the change in the retail price index between April 1973 and February 1978—the latest available.