§ Mr. Ieuan Wyn JonesTo ask the Chancellor of the Exchequer if he will make an estimate of the change in Treasury income during the 1988–89 financial year resulting from setting income tax rates as follows: nil to £5,200 at 20 per cent., £5,201 to £9,500 at 25 per cent., £9,501 to £13,000 at 30 per cent., £13,001 to £18,000 at 35 per cent., £18,001 to £24,000 at 40 per cent., £24,001 to £30,000 at 50 per cent., £30,001 to £39,000 at 55 per cent., and £39,001 or more at 60 per cent.
§ Mr. Norman Lamont[holding answer 19 January 1988]: The direct revenue cost in a full year at 1988–89 levels of income of the proposed regime would be about £5.5 billion more than the cost of indexation of the current income tax regime, in accordance with the statutory formula. This estimate assumes that the regime would retain the indexed levels of personal allowances and that the wife's earnings election is made where it is beneficial. No other allowance is made for possible changes in taxpayers' behaviour.