§ Baroness Wootton of Abingerasked Her Majesty's Government:
On the assumption that all income tax rates and allowances except those affecting the upper income bands remained as at present, how much additional revenue would be raised if the rates on (a) gross incomes of over £10,000 per annum and (b) gross incomes of over £20,000 per annum were restored to the rates charged before the Budget changes of June 1979.
§ The Minister of State, Treasury (Lord Cockfield)It is not possible to say what the yield of increasing rates of tax would be without at the same time specifying at what points on the income scale those rates would be charged. It would be misleading to take the actual cash figures for 1978–79 because of the rise in prices which has occurred since then, a rise reflected in greater or less degree in both the tax thresholds and the thresholds for the higher rate bands. There can, therefore, be no simple answer to the noble Baroness's Question. But if one were to assume, for example, that the rate bands for rates up to 60 per cent. remain as at present and the 1978–79 band widths for the 60 per cent. and higher rates of tax were uprated by reference to movements in prices over the relevant period and imposed from the current starting point for the 60 per cent. rate (a taxable income of £27,751), the yield in a full year at 1981–82 income levels would be £200 million. The whole of this yield would relate to gross incomes over £20,000.