§ Mr. Lawsonasked the Chancellor of the Exchequer what would be the cost in a full year of taxing all earned income above the basic rate band at 50 per cent.
§ Mr. Robert SheldonI shall let the hon. Member have a reply as soon as possible.
§ Mr. Lawsonasked the Chancellor of the Exchequer if he will give his estimates of the cost to the Revenue in 1978–79 and in a full year of making the following tax changes over and above those in the Budget statement: (a) a reduction in the basic rate of tax from 34 per cent. to 33 per cent.; (b) extension of the basic rate band by £1,000 to £7,250, (c) an increase 356W in the investment income surcharge thresholds to £2,000 for those under 65 years of age and £3,000 for those aged 65 years of age and over, and harmonisation of the 10 per cent. band at £500 in each case, and (d) taxing slices of taxable income in excess of £8,000 at the following rates: the first £2,000 at 40 per cent., the next £4,000 at 50 per cent., the next £7,000 at 60 per cent., and the remainder at 70 per cent., and the cost of (b) above to be calculated on the basis that the change in (a) above has already been achieved, and the cost of (d) above to be calculated on the basis that the change in (b) above has already been achieved.
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 3rd May 1978; Vol 949, c. 188–89], gave the following information:
The costs at 1978–79 income levels are:
1978–79 Full year £ million £ million (a) 340* 370 (b) 40 50 (c) 5 30 (d) 155 335 Total 540 785 *This does not include the first-year cost, estimated at £33 million, of a consequential change in the rate of advance corporation tax. There is no cost on this account in a full year. As requested, the costs above have been calculated in the order shown and on the assumption that each change is additional to the previous changes.
§ Mr. Tim Rentonasked the Chancellor of the Exchequer what would be additional cost to the Revenue, following the Budgets, of reducing the top rate of tax from 83 per cent. to 80 per cent. on earned income and from 98 per cent. to 95 per cent. on unearned income.
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 2nd May 1978; Vol. 949, c. 103], gave the following answer:
About £25 million.
§ Mr. Tim Rentonasked the Chancellor of the Exchequer what would be the additional cost to the Revenue, following the Chancellor's Budget proposals, of increasing the basic rate band of taxable income from £7,000 to £10,000 with new higher rate bands as follows: £10,000–£12,000 357W at 40 per cent., £12,001–£14,000 at 45 per cent., £14,001–£16,000 at 50 per cent., £16,001–£18,000 at 55 per cent., £18,001–£20,000 at 60 per cent., £20,001–£22,000 at 70 per cent., £22,001–£23,000 at 75 per cent., and over £23,000 at 83 per cent.
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 2nd May 1978: Vol. 949, c. 103], gave the following answer:
About £445 million at 1978–79 income levels and after taking account of the proposals in the Budget Statement.
§ Mr. Ian Stewartasked the Chancellor of the Exchequer what would be the revenue effect of reducing the proposed lower rate band of income tax at 25 per cent. from £750 to £500.
§ Mr. Denzil Davies, pursuant to the reply [Official Report, 2nd May 1978; Vol. 949, c. 103], gave the following answer:
About £490 million at 1978–79 income levels and after taking account of the proposals in the Budget Statement, on the assumption that the proposed width of the basic rate band was increased by £250 to £6,500.