§ Mr. McCrindleasked the Chancellor of the Exchequer if he will estimate the cost of raising the income tax threshold to £4,000; how many people this would take out of tax altogether; and if he will make a statement.
§ Mr. Norman Lamont[pursuant to his reply, 14 July 1987]: The estimated full-year cost of changing all income tax thresholds to £4,000 would be just over £5½ billion at 1987–88 levels of income and 2.2 million tax units (single people and married couples) would be taken out of tax. These figures assume that the single person's allowance, the wife's earned income allowance, the married man's allowance and the age allowances are all changed to £4,000. This means that the age allowances for married couples would be lowered from their present levels and, as a consequence, 200,000 married couples aged 65 or over would be brought into tax. Overall, there would be 2 million fewer single people and married couples paying tax as a result of the measure.