§ Mr. Gordon BrownTo ask the Chancellor of the Exchequer if he will give for 1988–89 the total reduction in income tax, inheritance tax and capital gains tax liability following the Budget that will accrue to the top(a) 0.1 per cent., (b) 1 per cent., (c) 5 per cent. and (d) 10 per cent. of taxpayers and to the bottom (i) 70 per cent., (ii) 60 per cent., (iii) 50 per cent., (iv) 25 per cent., (v) 10 per cent. and (vi) 5 per cent. of taxpayers.
§ Mr. Norman Lamont[holding answer 21 April 1988]: I regret that information is not available to make reliable estimates in the detail requested for inheritance tax and capital gains tax. However, it is estimated that under the Budget proposals the reduction in capital gains tax on gains realised in 1988–89 by the top 5 per cent. of income tax payers will be rather less than £50 million.
Estimates of the direct revenue costs in a full year of the income tax changes above indexation are given in the table. Reliable estimates cannot be made for the top 0.1 per cent. of taxpayers since the estimates are based on projections of the 1985–86 survey of personal income.
Reductions in income tax liability compared with the indexed 1987–88 tax regime Range of quantiles1 of the income tax distribution Reduction in tax £ million Top: 1 per cent. 1,880 5 per cent. 2,690 10 per cent. 3,160 Bottom2: 70 per cent. 1,730 60 per cent. 1,310 50 per cent. 960 25 per cent. 330 10 per cent. 100 5 per cent. 40 All taxpayers 6,050 1 Based on the distribution of income tax under the proposed 1988–89 tax regime. 2 Includes 240,000 single people and married couples taken out of tax by increases in allowances over indexation.