§ Mr. Nicholas BrownTo ask the Chancellor of the Exchequer if he will estimate, on the same basis as the ready reckoner published in the autumn statement, the effect on a one-earner, two-child family of spending in 1991–92 the same sum on(a) a cut in the basic rate of income tax, (b) raising income tax thresholds above their indexed levels, (c) raising child benefit assuming (i) no change in income support and family credit rates and (ii) corresponding changes in income support and family credit rates.
§ Mr. Maude[holding answer 21 January 1991]: The effects of the various changes to income tax and child benefit on a married man on average earnings with two children are given in the table. In a full year each of the changes would cost £1.95 billion, the cost of a 1p cut in the basic rate of income tax. Estimates are based on projections of the 1988–89 survey of personal incomes in line with forecasts in the autumn statement.
Increase in income after tax1 compared with indexation in 1991–92 for a married man2 on average earnings3 with two children £ per week (a) 1p cut in basic rate 2.34 (b) Increase in main income tax allowance 1.68 (c) Increase in child benefit (i) £6. 30 per week per child4 12.60 (ii) £3. 07 per week per child5 6.14 1 Disregarding any change to entitlement to social security income-related benefits except in item (c) (ii). 2 Assumed to have no reliefs and allowances other than the personal allowance and the married couple's allowance. 3 Average earnings assumed to be £334.1 per week. 4 Assuming no change in income support and family credit children's rates. 5 Assuming corresponding changes in income support and family credit children's rates.