HC Deb 18 January 1988 vol 125 cc473-5W
Dr. Cunningham

To ask the Chancellor of the Exchequer if he will publish in theOfficial Report a table showing, for each decile of persons, households or tax units (i) the average annual income and the amount

Households ranked by Gross Income, 1985
Decile Groups
Bottom 2nd 3rd 4th 5th 6th 7th 8th 9th Top
(i) (£ per year)
Gross income 2,401 3,447 4,618 6,294 8,160 10,029 12,049 14,491 17,950 28,218
Income tax1 4 49 119 425 794 1,094 1,518 1,985 2,799 5,380
National Insurance contributions 6 11 50 196 390 547 698 866 1,048 1,358
Domestic rates2 131 171 221 292 337 369 389 445 465 577
Indirect taxes 491 691 988 1,308 1,568 1,847 2,029 2,492 2,796 3,865

ready reckoner published in the Autumn Statement, the effect on a one-earner, two-child family of spending in 1988–89 the same sum on (a) a one penny cut in the basic rate of income tax, (b) raising income tax thresholds above their indexed levels and (c) raising child benefit, assuming (i) no change in income support rates and (ii) corresponding changes in income support rates.

Mr. Norman Lamont

[holding answer 17 December 1987]: The effects of the proposed changes on a one earner, two child family vary according to the level of income of the family. The table contains information based on direct revenue or expenditure cost in a full year at forecast 1988–89 levels for selected, specimen levels of earnings. Each of the measures would cost £1.4 billion in a full year at 1988–89 levels of income—ie, the full-year figure underlying the first-year cost of a 1p cut in the basic rate of income tax, £1.25 billion, shown, in the Autumn Statement.

The income tax changes compared with the 1987–88 tax regime indexed to 1988–89 according to the statutory provisions under the same assumptions about price movements as were used in the Autumn Statement. The income tax calculations assume that all personal allowances and higher-rate thresholds would increase by the same percentage and disregard any changes in social security income-related benefits to which the family may be entitled. It has also been assumed that the only tax relief or allowance available to the married couple is the married man's allowance and that the wife has no earnings.

thereof paid in (a) direct taxes, (b) indirect taxes and (c) household rates and (ii) the percentage of annual income such payments represent for each decile.

Mr. Major

[holding answer, 13 January 1988]: The information requested is given in the table in respect of 1985, the latest year for which estimates are available. The unit of analysis is the household and gross income represents income from all sources.

Decile Groups
Bottom 2nd 3rd 4th 5th 6th 7th 8th 9th Top
(ii) (percentages of gross income)
Income tax1 0.2 1.4 2.6 6.8 9.7 10.9 12.6 13.7 15.6 19.1
National insurance contributions 0.2 0.3 1.1 3.1 4.8 5.5 5.8 6.0 5.8 4.8
Domestic rates2 5.5 5.0 4.8 4.6 4.1 3.7 3.2 3.1 2.6 2.0
Indirect taxes 20.4 20.0 21.4 20.8 19.2 18.4 16 8 17.2 15 6 13.7
1 Net of tax relief at source on mortgage interest and life assurance premiums.
2 Net of the rate rebate element of housing benefit.

Source: CSO estimates based on the 1985 Family Expenditure Survey.