§ Mr. AllenTo ask the Chancellor of the Exchequer if he will estimate the change in Treasury income during the financial year 1991–92 resulting from(a) increasing all personal allowances in line with the rise in average earnings and (b) increasing the threshold for the higher rate of income tax in line with earnings rather than prices.
§ Mr. MaudeAt 1991–92 levels of income the estimated tax yield resulting from indexation in line with earnings compared with price indexation are as shown in the table. The estimates are based on the illustrative rate of price indexation of 10.25 per cent. and the working assumption of an 8.5 per cent. increase in average earnings between 1990–91 and 1991–92 used in the autumn statement 1990.
£ million Yield in a full year Yield in 1991–92 Personal allowances 450 340 Threshold for higher rate 120 70