§ Mr. GalbraithTo ask the Chancellor of the Exchequer (1) if he will estimate, for each of the last five years, the cost of providing tax relief on private medical insurance(a) throughout the United Kingdom, and (b) in Scotland;
(2) what was the estimated cost to the Treasury of relief to (a) companies, (b) employees, (c) self-employed, and (d) other sources in each of the last five years, as a result of contributions to private health care premiums, in (i) the United Kingdom, and (ii) Scotland.
§ Mr. Norman Lamont[holding answers 28 June 1988]: I assume that the hon. Member is referring to the costs of extending income tax relief to all private medical insurance premiums. Under present legislation, relief is available only on premiums paid by employers on behalf of employees whose earned income, including the value of benefits, is less than £8,500 per year. The cost of this relief is about £10 million per year in the United Kingdom and about £1 million in Scotland.
The estimated direct revenue cost of giving relief on all premiums, based on present levels of contributions, is about £240 million, of which about £10 million would be incurred in Scotland. These estimates make no allowance for any behavioural changes.