§ Mr. Meacherasked the Chancellor of the Exchequer what gains he estimates will accrue or have accrued to (a) the unemployed, (b) pensioners and (c) employed persons with incomes per year of (i) under £5,000, (ii) £10,000, (iii) £10,000 to £15,000, (iv) £15,000 to £20,000. (v) £20,000 to £30,000, (vi) £30,000 to £50,000, (vii) £50,000 to £70,000, (viii) £70,000 to £100,000 and (ix) over £100,000 (1) as a result of his Budget of 17 March and (2) cumulatively as a result of all Budgets since 1979; how many persons are in each group; and what has been the average gain for members of each group.
§ Mr. Norman LamontI regret the delay in replying to this question. The table gives estimates of reductions in income tax liabilities at 1987–88 income levels of the proposed allowances, thresholds and rates for 1987–88. Estimates are given for taxpayers aged over 65 and for employed persons (taken as those with earnings from employment as a main or subsidiary source of income): on this basis, some taxpayers may be in both categories and some of those shown as employed may have a spell of unemployment during the year. All information is in terms of single people and married couples. The proposed 1987–88 tax regime is compared with (1) the 1986–87 lax regime and (2) the 1978–79 tax regime, both indexed to 1987–88 levels by reference to the statutory provisions. Some of the income ranges have been combined in order to provide reliable estimates.
No comparable figures are available for the unemployed. Income tax changes can have no direct effect on 325W the net incomes of those who are not taxpayers, but income tax cuts in successive Budgets have helped improve incentives and stimulate enterprise and efficiency, thereby helping to create jobs.
Gains from the 1987 Budget Gain compared with Range of Income £ per year Number of tax units in 1987–882 Million Indexed1 31986–87 tax regime Indexed2 31978–79 tax regime Amount Average4 per tax Amount Average4 per tax £ million unit £ per year £ million unit £ per year Employed Persons Under 5,000 2.2 50 20 240 110 5,00–10,000 5.9 460 80 1,560 270 10,000–15,000 4.7 640 140 2,210 470 15,000–20,000 2.5 500 210 1,680 680 20,000–30,000 1.4 450 310 1,630 1,150 30,000–50,000 0.5 180 360 1.090 2,240 Over 50,000 0.12 20 210 760 6,590 Total 17.3 2,310 130 9,620 450 Taxpayers Aged 65 and over Under 5,000 0.7 10 20 50 80 5,000–10,000 1.2 80 50 250 200 10,000–15,000 0.4 60 160 230 650 15,000–20,000 0.2 40 250 180 1,170 20,000–30,000 0.1 40 340 260 2,050 Over 30,000 0.07 20 240 520 7,550 Total 2.6 230 90 1,480 570 1 Tax units where at least one member has earnings from employment as a main or subsidiary source of income. 2 Married couples are counted as one and their incomes combined. 3 By reference to the statutory formula. 4 By reference to the numbers paying tax in 1987–88.