HC Deb 13 January 1987 vol 108 cc150-1W
Mr. Meacher

asked the Chancellor of the Exchequer what has been the gain or loss to those with incomes (a) under £5,000, (b) £5,000 to £10,000, (c) £10,000 to £15,000, (d) £15,000 to £20,000, (e) £20,000 to £30,000, (f) £30,000 to £50,000, (g) £50,000 to £70,000 and over £70,000 a year as a result of each Finance Act since 1979, both in aggregate and per person on average in each of these categories, in each case indicating how much is due to indexation and how much is real gain.

Mr. Norman Lamont

[pursuant to his reply, 12 January 1986]: 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 a provisional estimate of 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.

Reductions (+) Increases (-) in income tax compared with 1978–79 indexed regime
(£ million)
Range of total Income in 1986–871 Number units paying tax in 1986–87 (million) 1979–80 1980–81 1981–82 1982–83 1983–84 1984–85 1985–86 1986–87
Under 5,000 3.8 250 110 -310 -270 -30 110 240 280
5,000 to 10,000 7.8 1,220 740 -240 -140 420 810 1,130 1,420
10,000 to 15,000 4.9 1,330 950 200 290 710 1,110 1,370 1,720
15,000 to 20,000 2.2 880 670 270 320 540 790 930 1,160
20,000 to 30,000 1.3 990 810 320 390 660 900 1,010 1,210
30,000 to 50,000 0.4 920 810 470 510 690 910 960 1,030
50,000 to 70,000 0.07 380 350 260 270 310 380 390 400
Over 70,000 0.05 770 750 680 690 730 870 880 880
Total 20.5 6,740 5,190 1,650 2,060 4,030 5,880 6,910 8,100

Average gain (+) loss(-) per tax uint (£ per annum)
Range of total Income in 1986–871 1979–80 1980–81 1981–82 1982–83 1983–84 1984–85 1985–86 1986–87
2Under 5,000 60 30 -70 -60 -10 30 60 60
225,000 to 10,000 150 90 -30 -20 50 100 140 180
10,000 to 15,000 270 190 40 60 140 230 280 350
15,000 to 20,000 400 300 120 150 250 360 420 530
20,000 to 30,000 760 630 250 300 510 700 780 930
30,000 to 50,000 2,080 1,830 1,060 1,160 1,570 2,060 2,170 2,320
50,000 to 70,000 5,550 5,100 3,780 3,950 4,650 5,680 5,840 5,930
Over 70,000 16,900 16,400 14,800 15,000 15,800 18,900 19,100 19,100
Total 320 250 80 100 190 280 330 380
1All information is in terms of tax units—that is married couples are counted as one and their incomes combined.
2Average 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.