HC Deb 04 June 1980 vol 985 cc727-8W
Mr. Hordern

asked the Chancellor of the Exchequer what proportion, taking both tax reductions and increases in personal and family allowances together, of those combined benefits was received by the 5 per cent with the highest incomes, the next 15 per cent, and the remaining 80 per cent, in the last two Budgets, in money and percentage terms.

Mr. Peter Rees

I refer my hon. Friend to the reply I gave to the hon. Member for Oldham, West (Mr. Meacher) on 15 May.—[Vol. 984, c.653–54.]

That reply shows the figures for the last two Budgets in respect of income tax for 1979–80 and 1980–81 respectively, for taxpayers with incomes in the top 1 per cent. and the next 9 per cent., the next 10 per cent. and the lowest 80 per cent. of incomes subject to tax.

No changes in child benefit rates were announced in the June 1979 Budget, but the child benefit increase for one-parent families was uprated in November 1979. It was announced in the March 1980 Budget speech that child benefit, and the one-parent premium, would rise again in November 1980.

Since the dates of increase in child benefit over this period have been changed from April to November, there are some difficulties in combining child benefit increases and tax changes.

The first table below shows the effect of including with income tax the changes in child benefit actually received in 1980–81 compared with 1979–80 levels.

1980 BUDGET
Group Cost £ million Percentage
Top 1 per cent. 123 7.1
Next 9 per cent. 323 18.7
Next 10 per cent. 196 11.4
Next 80 per cent. 1,083 62.8
1,725 100.0

As regards the 1979 Budget, the figures remain as in the reply I have referred to, as the increase in November 1979 in the premium for single-parent families makes a negligible difference to the figures in that answer.

Such a presentation will not show the true effect of changes in child benefit when these occur regularly in November. If, alternatively, changes in the child benefit level for the 12-month period November 1980 to November 1981 are added to the tax changes for the financial year 1980–81, the figures in the following table are obtained:

1980 BUDGET
Group Cost £ million Percentage
Top 1 per cent. 129 6.2
Next 9 per cent. 367 17.7
Next 10 per cent. 245 118
Next 80 per cent. 1,337 64.3
2,078 100.0