§ Mr. Hordernasked the Chancellor of the Exchequer (1) what would be the cost of raising all the main tax allowances by 6 per cent. and alternatively by 12 per cent;
(2) what would be the cost of raising the tax bands for the higher rates of tax by 6 per cent. and alternatively by 12 per cent.
§ Mr. RidleyFull year costs at 1982–83 income levels are: 577W
£ million Increase by 6 per cent. Increase by 12 per cent. Main personal allowances 970 1,890 Higher rate bands* 110 200 * These are the additional costs after allowances have been increased; but the cost of increasing the higher rate bands in isolation would be virtually identical. The figures do not include the cost of increasing the investment income surcharge threshold, which would be an additional £15 million and £25 million respectively. Estimates of the cost of indexation by 6 per cent.—following the rules for rounding-up set out in the 1980 Finance Act—at forecast income levels of 1983–84 are set out in table 5.4 of the autumn statement 1982. Table 5.5 gives estimates for the effect of specimen changes in allowances and bands on top of indexation, again at forecast 1983–84 income levels on the basis of the economic assumptions set out in the autumn statement.
§ Mr. Hordernasked the Chancellor of the Exchequer by how much, if the married man's tax allowance had first been reduced to the same level as the single allowance, it would be possible to raise tax allowances with the extra revenue.
§ Mr. WakehamThe estimate of the yield from reducing the married man's allowance to the level of the single person's allowance has been revised slightly since my hon. Friend the Financial Secretary answered my hon. Friend's previous question on this topic on 8 December. The latest estimate is £3,400 million in a full year at 1982–83 income levels. The main personal tax allowances—including the aged income limit—could then be raised by approximately 25 per cent.