Personal Incomes

HC Deb 21 October 1986 vol 102 cc812-3W

Mr. Meacher

asked the Chancellor of the Exchequer if he will indicate the gain or loss to those with incomes under £5,000, £5,000 to £10,000, £10,000 to £15,000, £15,000 to £20,000, £20,000 to £30,000, £30,000 to £50,000 and over £50,000 a year in each Budget separately since 1979, including the 1986 Budget, including both aggregate changes for those in each category and the average change per taxpayer in each category and in every case indicating how much is due to indexation and how much is a real gain.

Mr. Norman Lamont

The information is in the tables. For each financial year shown, the tables compare the yield from the tax regime in that year with the 1978–79 tax regime. All estimates are calculated on the 1986–87 tax base and all tax regimes have been indexed to 1986–87 levels by reference to the statutory formula. The comparisons therefore allow for budgetary changes in income tax rates and allowances, but not for any changes since 1978–79 in the definition of the income tax base.

The first table shows the total reduction (-) or increase (+) in tax yield from each income range; and the second table shows the average change for individual tax units.

As child tax allowances were being phased out in 1978–79 they have been excluded from the comparison.

It is not possible to provide useful estimates of the liabilities in 1986–87 for the 1978–79 regime without indexation since Inland Revenue records do not cover many of the people who would be brought into tax by such low levels of personal allowances. A partial analysis with incomplete coverage would be misleading.

Range of total income in 1986–871 £	1979–80	1980–81	1981–82	1982–83	1983–84	1984–85	1985–86	1986–87
Over 50,000	10,500	9,990	8,530	8,720	9,480	11,420	11,560	11,640
Total	320	250	80	100	190	280	330	380
1 All information is in terms of tax units—that is married couples are counted as one and their incomes combined.
2 Average gains and losses are calculated by reference to the estimated number who would be liable to pay tax under the indexed 1978–79 regime; this number is some 900,000 greater than the numbers paying tax in 1986–87, some 750,000 in the income range below £5,000 and 150,000 in the range £5,000 to £10,000.