Income Tax (Hansard, 9 March 1981)

§ Mr. Peter Rees

(a) The tax saving if personal allowances were set against the basic rate of tax only would be about £230 million in a full year at 1980–81 income levels. This represents the cost of raising the main personal allowances by around 1½ per cent.

(b) The saving for 1979–80 if other exemptions and reliefs were abolished is given in the source referred to in the question. Equivalent figures for 1980–81 will appear in the public expenditure White Paper to be published at the time of the Budget. The table covers only those items for which costs can be estimated—a list of uncosted reliefs is given in table 1.13 of Inland Revenue Statistics 1980—and each is costed separately. It is not possible to estimate the combined cost of withdrawing them altogether, nor the equivalent rise in tax thresholds.

Nationalised Industries' External Financing Limits (EFLs)
					£ million
	1978–79	1979–80	1980–81
	EFL's	Outturns	EFL's	Outturns	EFL's
National Coal Board	625	604	709	651	834
Electricity (England and Wales)	–75	–102	–68¶	189	187
North of Scotland Hydro-Electric Board	90	52	52═	59	59
South of Scotland Electricity Board	78	–10	47°	55	73
British Gas Corporation	–172	–429	–449	–447	–400
British National Oil Corporation^✶	259	269	115	–27	–200
British Steel Corporation	875	752	700	579#	571#
Post Office	–33	–72	–110	240^✶^✶	–280^✶^✶
British Airways Board	59	66‡	172	171	219‡ ‡
British Airports Authority	1	–4	—	—	20
British Railways Board	646	620	715	714	750≈
British Transport Docks Board	–7	–13	–7	–7	–10
British Waterways Board	22	19	26	26	30
National Freight Corporation	32	29	28	28	24
National Bus Company	67	59	82	80	85
Scottish Transport Group	15	15	13	12	9
British Aerospace	12†	48	53	53	π
British Shipbuilders	83	117\|	250	236	120µ
^✶The external financing requirement for BNOC does not constitute a formal limit.
† An increase in BAe's EFL for 1978–79 to £62 million was announced on 7 February 1979.
‡ Excludes dividend on public dividend capital (£16 million) excluded by convention from 1978–79 BAB EFL.
\| Includes £74 million that BS was lending short-term on 31 March 1978. Use of these funds during 1978–79 was not included in the EFL.
¶ An increase in the Electricity (England and Wales) EFL for 1979-80 to £232 million was announced on 26 March 1980.
═An increase in the NSH—EB EFL for 1979–80 to £64 million was announced on 20 December 1979.
°An increase in the SSEB EFL for 1979-80 to £55 million was announced on 20 December 1979.
#The 1979–80 BSC outturn figure excludes liabilities amounting to £121 million which the Corporation were unable to meet during the steel strike, this sum has been carried forward into the 1980-81 EFL figure. An increase in the EFL for 1980–81 to £971 million was announced on 26 September 1980; a further increase to £1,121 was announced on 24 February 1981.
^✶^✶ The effect of the billing dispute amounting to £345 million is reflected in the PO 1979-80 outturn figure and the 1980-81 EFL. An increase in the EFL for 1980-81 to £135 million was announced on 6 March 1981.
†† The BAB 1980–81 EFL figure excludes the amount by which the dividend paid on public dividend capital fell short of the sum provided for in the original limit. An increase in the EFL for 1980-81 to £304 million was announced on 12 January 1981.
≈An increase in the BRB EFL for 1980–81 to £790 million was announced on 18 September 1980.
≈An increase in the STG EFL for 1980-81 to £12 million was announced on 19 December 1980.
πNo limit was set for BAe in 1980-81 in anticipation of the sale of shares in a successor company.
µAn increase in the BS EFL for 1980-81 to £185 million was announced on 13 November 1980.

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(c) If child benefit were made liable to tax, the yield, at 1980–81 benefit and income levels, would be some £820 million. This represents the cost of an increase of 5½ per cent, in the main personal allowances.