HC Deb 24 July 1991 vol 195 cc605-6W
Mr. Edwards

To ask the Chancellor of the Exchequer, pursuant to his answer to the hon. Member for Leeds, West (Mr. Battle) of 7 February,Official Report, columns 203–4, if he will publish a table taking account of the changes announced in the 1991 Budget showing the revised costs in 1991–92 of (a) personal allowance, (b) married couples allowance, (c) age allowance, (d) mortgage interest relief, (e) relief on contributions to personal pensions, (f) relief on employees' contributions to occupational pension schemes and (g) relief on contributions to health insurance schemes, and where applicable, the direct revenue yields in a full year at 1991–92 levels of income from restricting income tax allowances and reliefs to the basic rate.

Mr. Maude

[holding answer 22 July 1991]: The latest estimates of the direct revenue costs for 1991–92 are as follows. Each relief has been costed separately; the combined cost of more than one cannot, therefore, be calculated by summing the figures.

£ million
Personal allowance 26,500
Married couple's allowance 5,300
Age-related allowances1 700
Mortgage interest relief2 6,250
Relief on contributions to personal pensions3 1,300
Relief on employee's contributions to occupational pension schemes 2,300
Relief on contributions to health insurance schemes 60

The estimated direct revenue yields in a full year at 1991–92 levels of income from restricting the following income tax allowances and reliefs to the basic rate are:

£ million
Personal allowance 970
Married couple's allowance 340
Age-related allowances1 Nil
Mortgage interest relief2 n.a.
Relief on contributions to personal pensions3 4150
Relief on employee's contributions to occupational pension schemes 250
Relief on contributions to health insurance schemes 10
1 The higher levels of the age-related personal and married couple's allowances given to those aged 65 and over subject to the income limit.
2 Based on the assumption that currently announced interest rates remain at these levels for the remainder of 1991–92.
3 Including relief for retirement annuity premia and free standing additional voluntary contributions.
4 This estimate is subject to a wide margin of error.
n.a.—Not applicable.

The direct revenue yield from restricting all reliefs and allowances to the basic rate is likely to be of the order of £2,200 million, somewhat more than the sums of the yields from restricting the reliefs and allowances separately; this is due to the cumulative effect of bringing more people into higher rate tax. No account has been taken of possible behavioural change resulting from such a restriction.

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