§ Mr. Colin Shepherdasked the Chancellor of the Exchequer what would be the loss of revenue from income tax if the personal allowance for single people were to be raised to £3,320 and for married couples to £5,200; and what would be the net effect after allowing for recoupment by indirect taxation based on current spending patterns.
§ Mr. Norman LamontThe full year direct revenue cost of increasing the present personal tax allowances to £5,200 for a married man and £3,320 for a single person is approximately £7 billion at 1987–88 income levels. The net cost, after allowing for increased payments of indirect taxes is likely to be somewhat less, but this cannot he estimated readily since a range of macro-economic factors would be involved.