§ Mr. Ralph Howellasked the Prime Minister what would be the loss in revenue if (a) income tax thresholds and (b) national insurance thresholds were raised to £2,500 for a single person and £5,000 for a married couple per year; and what would be the financial effect on a man with a wife and two children with an income of £100 per week and whose rent and rates were £20 and £5, respectively, if at the same time child benefit, all housing benefits and family income supplement were abolished.
§ The Prime MinisterThe cost of increasing the single person's income tax allowance to £2,500 and the married man's allowance to £5,000 would be about £7.6 billion in a full year at 1984–85 levels of income. The reduction in national insurance contributions if the lower earnings limit was raised to £2,500 per year for single people and to £5,000 per year for married couples, in relation to their joint earnings, would be about £1.1 billion in 1984–85. This estimate assumes no change in the contracted-out rebate in respect of people remaining liable to contributions. On the assumptions given, the family specified would lose £788 in 1984–85.