§ Mr. Marlowasked the Chancellor of the Exchequer what would be the increase in the standard rate of income tax necessary to match the expected yield from the increase in national insurance contributions announced on 24 November; and what would be the additional income tax payable by a married man with two children and average mortgage payments earning £6,000, £6,500, £7,000, £7,500, £8,000, £8,500, £9,000, £9,500, £10,000, £10,500 £11,000, £11,500, and £12,000 per annum respectively.
§ Mr. Peter Rees[pursuant to his reply, 27 November 1980]: The increase in the rate of national insurance contributions announced by my right hon. and learned Friend the Chancellor on 24 November related to 1981–82. It is not the practice to make forecasts of the effects of changes in income tax for future years before the Budget; however, a comparison is possible on the basis of forecast 1980–81 income levels. On this basis a yield of about £1 billion, equivalent to the yield in a full year from the increase in the rates of national insurance contributions paid by employees and the self-employed — but excluding the effect of increasing the upper earnings limit—could be achieved by an extra 1¼p on the basic rate of income tax. The additional tax paid by a married man with an average mortgage would be:
Annual Earnings £
Additional Tax £
6,000 35 6,500 41 7,000 47 7,500 54 8,000 60 8,500 66 9,000 72 9,500 79 10,000 85 10,500 91 11,000 97 11,500 104 12,000 110 The figures are calculated taking account of the tax relief on a mortgage of £7,100, the average balance outstanding on all building society mortgages in 1979, with in interest rate of 15 per cent.