§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer if he will give a breakdown of the marital status of those caught in the poverty and employment traps; what effect his proposals for the separate taxation of husbands and wives will have on the numbers caught in each trap; and whether he will publish in theOfficial Report figures for his revised proposals corresponding to those in chart 3.2 of Cmnd. 9756 on the Green Paper basis and on the present basis together with the number of low-earning households which will be worse off than at present as a result of the restriction on the transfer of any part of the husband's personal allowance to the wife.
§ Mr. Norman LamontThe number of families in the poverty and unemployment traps is a matter for my right hon. Friend the Secretary of State for Social Security. The introduction of independent taxation will have a negligible effect on the number of families in either trap in 1990–91.
An update of the figures underlying chart 3.2 of Cmnd. 9756 could be provided only at disproportionate cost. There are transitional provisions which ensure that no married couple will suffer a cash reduction in their total tax allowances simply as a result of the change to independent taxation.
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§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer if, further to paragraphs 12 and 13 of annex 4 to Comnd. 9756, he will publish in theOfficial Report a table showing the changes in the number paying tax and average gain or loss in each case as a result of his revised proposals at current rates of income tax.
§ Mr. Norman LamontWhen independent taxation is introduced in April 1990, the number of higher rate taxpayers will fall to about 1 million and the provisions for wives' earnings elections will be withdrawn. Details of the average gains to individuals from the introduction of independent taxation were included in the Inland Revenue press release of 15 March 1988. Further estimates were provided to the hon. Member for Dunfermline, East (Mr. Brown) on 19 May at columns574–76. I regret that further estimates could be provided only at disproportionate cost.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what was the economic case for reducing income tax on investment income in the case of those with an income in excess of the ceiling below which there is an entitlement to income support; and if he will publish in theOfficial Report an estimate of the saving to the Revenue from increasing the tax on investment income by eight percentage points.
§ Mr. Norman LamontThe reduction in tax rates in the 1988 Budget will have improved incentives for all taxpayers both to earn and to invest. A surcharge on investment income of 8 per cent. would yield just over £1.5 billion per annum at 1989–90 income levels. This estimate takes no account of any behavioural changes that would follow the introduction of the surcharge. The estimate is based on a projection of the 1985–86 survey of personal incomes and is therefore provisional.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer whether he will publish in theOfficial Report a table comparing the changes in the numbers paying tax and the average gain or loss in each case with his revised proposals at current rates of income and tax along the lines of paragraphs 9 and 11 of annex 4 Cmnd. 9756.
§ Mr. Norman LamontWhen independent taxation is introduced in April 1990, the number of elderly married couples liable to income tax will fall by about 160,000. The reduction in the number of married couples of working age liable to tax will be small.
Details of average gains from independent taxation, analysed by income, were included in the Inland Revenue press release of 15 March 1988. Further estimates were provided to the hon. Member for Dunfermline, East (Mr. Brown) on 19 May at columns 574–76.
§ Mr. RedmondTo ask the Chancellor of the Exchequer if he will be reconsidering the use of negative taxation as set out by the Government of the day in 1972 in their White Paper on this subject; and if he will make a statement.
§ Mr. Norman LamontNo.
§ Mr. AllenTo ask the Chancellor of the Exchequer what was the take-up of the tax cuts announced in his Budget; and if he will make a statement.
§ Mr. Norman LamontThe cut in the basic rate of income tax and the double indexation of personal 417W allowances benefited all 25 million income taxpayers. The abolition of all higher rates above 40 per cent. benefited the 1.6 million people who pay income tax at the higher rate. In addition, some 750,000 people were taken out of the income tax net altogether by the increase in personal allowances.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer whether he will consider introducing a scheme for gradually drawing back personal income tax alllowances on the lines of the present age allowance.
§ Mr. Norman LamontNo.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what is his estimate of the number of unmarried couples eligible for two additional personal allowances, the number claiming two allowances, and the estimated saving to the Exchequer from reducing their entitlement to one additional allowance in 1989–90.
§ Mr. Norman LamontWe estimate that about 20,000 unmarried couples may be affected by the change made in section 30 of the Finance Act 1988 restricting unmarried couples with children to only one additional personal allowance between them. There should be a small tax yield of around £5 million.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer, whether, in advocating the conversion of
Starting rates of income tax (percentages) United Kingdom: 1969–70 United Kingdom: 1970–80 United Kingdom: 1984–85 United Kingdom: 1988–89 Others: 1969 Others: 1979 Others: 1984 Others: 1988 United Kingdom 30 25 30 25 Federal Republic of Germany 19 22 22 22 Netherlands 4 20 16 14 Belgium 1 2 19.7 20 21.7 24.2 Denmark1 18 18 14.4 22 France 5 5 5 5 Japan1 10 10 10.5 10.5 United States of America1 14 14 11 15 1 Plus local income taxes at varying rates. 2 For lower income levels a percentage figure is not quoted. The figures given are effective start rates estimated from the official tax table.