§ Mr. Silvesterasked the Chancellor of the Exchequer what proportion of the loss of tax revenue if the investment income of husband and wife were taxed independently is attributable to persons over retirement age.
§ Mr. Moore[pursuant to his reply, 18 February 1985, c. 402]: This would depend on the particular regime for
326W
Fiscal Unchanged PSBR/GDP ratio Unchanged tax rates Monetary Unchanged money supply Unchanged interest rates Year 3 -0.9 -1.6 Year 4 -0.5 -1.2 PSBR (percentage of GDP) Year 1 0 0.7 Year 2 0 -0.1 Year 3 0 -0.2 Year 4 0 -0.4 Money supply (average of M0 and £M3) Year 1 0 -2.1 Year 2 0 -2.8 Year 3 0 -2.1 Year 4 0 -3.7 Long-term interest rates Year 1 -0.4 -0.1 Year 2 -0.3 -0.4 Year 3 -0.2 -0.5 Year 4 -0.2 -0.2 * Nominal wages are reduced to the extent necessary to reduce real wages by 2 per cent. † Defined as follows: Fiscal: Unchanged PSBR/GDP ratio achieved by varying income tax; also unchanged cash— limited expenditure in real terms. Unchanged tax rates and cash-limited expenditure in real terms. Monetary: Unchanged money supply achieved by varying interest rates. Unchanged short-term nominal interest rates. ‡Aggregate wages deflated by the RPI.