§ Mr. Frank Fieldasked the Chancellor of the Exchequer if he will publish in the Official Report a distributional analysis of all income tax reductions since 1979 (a) taking the gains to the top 1 per cent., top 2 to 5 per cent., top 6 to 10 per cent., top 11 to 20 per cent., top 21 to 30 per cent., top 31 to 50 per cent., bottom 50 per cent., points in the income distribution, giving the number of tax units for each group, the reduction in income tax for each group compared with 1978–79, and the average per tax unit, and (b) taking the gains to those with total income 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 £40,000, £40,000 to £50,000, over £50,000, giving the number of units paying tax and the reduction in income tax compared with 1978–79, giving both the amount for each income group and the average per tax unit.
§ Mr. Norman Lamont[pursuant to his reply, 20 July 1987, c. 75]: The tables show the latest estimates of reductions in income tax liabilities at 1987–88 income levels of the 1987–88 income tax regime compared with an indexed 1978–79 regime. The comparison thus allows for budgetary changes in tax rates, thresholds and allowances but not for any change in the definition of the tax base. The 1978–79 allowances and thresholds have been indexed in line with the increase in the retail prices index between 569W December 1977 and December 1986. As child tax allowances were being phased out in 1978–79 they have been excluded from the comparison.
TABLE 1 Reductions in Income Tax Liabilities in 1987–88 compared with 1978–79 Indexed Tax Regime Point of income distribution1 in 1987–88 Number of units2 paying tax in 1987–88 Reduction in tax Average3 reduction in income tax compared with the 1978–79 indexed regime '000s £ million £ per year Top 1 per cent. 210 1,870 9,030 Top 2 to 5 per cent. 830 1,690 2,040 Top 6 to 10 per cent. 1,040 1,240 1,190 Top 11 to 20 per cent. 2,080 1,760 850 Top 21 to 30 per cent. 2,080 890 430 Top 31 to 50 per cent. 4,150 1,580 380 Bottom 50 per cent. 10,380 2,110 200 All 20,750 11,150 540 Notes:
1 Based on 20,750,000 single people and married couples expected to pay tax in 1987–88 and excluding 850,000 who would pay tax under the revalorised 1978–79 regime.
2 All information is in terms of tax units i.e. married couples are counted as one and their incomes combined.
3 By reference to the numbers paying tax in 1987–88.
TABLE 2 Reductions in Income Tax Liabilities in 1987–88 compared with 1978–79 Indexed Tax Regime Range of gross income Number of units1 paying tax in 1987–88 Reduction in tax Average2 reduction in income tax compared with the 1978–79 indexed regime '000s £ million £ per year Under 5,000 3,210 330 90 5,000–10,000 7,610 1,940 250 10,000–15,000 5,130 2,120 410 15.000–20,000 2,590 1,860 720 20,000–30,000 1,510 1,860 1,230 30,000–40,000 410 860 2,100 40,000–50,000 140 540 3,730 over 50,000 150 1,640 10,790 All 20,750 11,150 540 Notes:
1 All information is in terms of tax units — that is, married couples are counted as one and their incomes combined.
2 Based on numbers of tax units liable to pay tax under the indexed 1978–79 regime; this is 850,000 more than the number paying tax in 1987–88.