§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what is his estimate of the change in the number of higher rate taxpayers in the current financial year; and if he will publish in theOfficial Report a table showing his estimate of their distribution by range of total income and tax category together with the aggregate tax liability in each case.
§ Mr. Norman LamontThe number of married couples and single people liable to higher rates of income tax is estimated to be 1,190,000 in 1987–88, and 1,250,000 in 1988–89. The tables show the distribution of those liable to higher rate tax in 1988–89 and their income tax liability by income and tax category.
Estimates are based on a projection of the 1985–86 survey of personal incomes and are provisional.
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Higher Rate Tax Units1 1988–89 Thousands Range of income Single Married couple (wife not working) Married couple (both working) All £ per year Under 20,000 0 0 0 0 20,000–25,000 50 10 10 70 25,000–30,000 70 90 150 320 30,000–50,000 90 190 360 630 Over 50,000 30 80 120 230 Total 240 370 640 1,250 1 Counting a married couple as one and combining the partners' incomes.
Total tax liability of Higher Rate Tax Units1 1988–89 £ million Range of income Single Married couple (wife not working) Married couple (both working) All2 £ per year Under 20,000 — — — — 20,000–25,000 260 50 20 330 25,000–30,000 470 540 820 1,830 30,000–50,000 860 1,710 2,750 5,320 Over 50,000 1,230 2,060 2,650 5,940 Total2 2,820 4,350 6,230 13,410 1 Counting a married couple as one and combining the partners' incomes. 2 Figures may not sum exactly due to rounding.
§ Mr. GrocottTo ask the Chancellor of the Exchequer what is his estimate of the effects which the changes in taxation introduced in his latest Budget will have upon the proportion of gross income which will be paid in taxes by each quintile of income groups and upon disposable income as a proportion of gross income in each case.
§ Mr. Norman LamontProvisional estimates based on a projection of the 1985–86 survey of personal incomes are as follows:
Income tax liability in 1988–89 as a percentage of gross income Before Budget changes2 After Budget changes2 per cent. per cent. Quintile group of taxpayers1 Top 20 per cent. 24.4 20.7 20–40 per cent. 16.9 15.1 40–60 per cent. 15.4 13.6 60–80 per cent. 12.9 11.1 Bottom 20 per cent. 7.5 5.8 1 Based on 20,900,000 tax units liable to pay tax in 1988–89. Married couples are counted as one unit and the partners' incomes combined. 2 Budget changes to main income tax allowances, thresholds, and rates only.
§ Mr. Gordon BrownTo ask the Chancellor of the Exchequer if he will give figures on distribution of total incomes before tax in 1985–86, giving numbers of incomes in the following ranges: less than £2,000, £2,000 to £2,500, £2,500 to £3,000, £3,000 to £3,500, £3,500 to £4,000, £4,000 to £4,500, £4,500 to £5,000, £5,000 to £6,000, £6,000 to £7,000, £7,000 to £8,000, £8,000 to £10,000, £10,000 to £12,000, £12,000 to £15,000, £15,000 to £20,000, £20,000 to £30,000, £30,000 to £50,000, £50,000 to £100,000, £100,000 and over, as set out in table 1 of the "Survey of Personal Incomes".
§ Mr. Norman LamontTable 1 of the survey of personal incomes excluded those with incomes below £2,000, which was, in 1984–85, the threshold for operation of pay-as-you-earn. Below this threshold, the tax records on which the survey is based are incomplete. Correspondingly, the 1985–86 table excludes those with incomes under £2,200. Neither table allows for the incomplete coverage in the tax records of investment income upon which basic rate tax liability has been satisfied at source.
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Range of total income before tax (lower limit) £ Numbers (thousands) 2,200 672 2,500 1,070 3,000 969 3,500 1,020 4,000 1,100 4,500 1,040 5,000 2,090 6,000 1,840 7,000 1,710 8,000 3,010 10,000 2,100 12,000 2,130 15,000 1,770 20,000 975 30,000 307 50,000 87 100,000 17 Total 21,900
§ Mr. Gordon BrownTo ask the Chancellor of the Exchequer if he will give the change in average personal income as defined in the survey of personal incomes(a) before tax and (b) after tax at 1980 prices using the gross domestic product deflator between 1978–79 and 1988–89 of (i) the bottom 20 per cent., (ii) the next 20 per cent., (iii) the next 20 per cent., (iv) the next 20 per cent., and (v) the top 20 per cent, of incomes, including those not paying tax, giving the percentage change between 1978–79 and 1988–89.
§ Mr. Norman LamontI regret that figures for 1988–89 to include those who do not pay tax are not available.
§ Mr. Gordon BrownTo ask the Chancellor of the Exchequer if he will give the average weekly earnings of(a) the lowest decile and (b) the highest decile of all employees, including within all employees male and female, full and part-time, whose pay was not affected by absence, in April 1979 and April 1987 at 1980 prices calculated using the gross domestic product deflator, giving the percentage change between the two dates.
§ Mr. MajorNo figures are available for the upper and lower deciles of average weekly earnings of all employees, both male and female, full and part time. However, figures for full-time employees (males and females separately) are to be found in the new earnings survey report. The GDP deflator is published on page 6 ofEconomic Trends.
§ Mr. John GreenwayTo ask the Chancellor of the Exchequer what has been the increase in real personal disposable income over the latest period for which official figures are available.
§ Mr. Norman LamontIn the first quarter of 1988 real personal disposable income was 5½ per cent, higher than a year earlier. Further growth is expected this year.