§ Mr. KnoxTo ask the Chancellor of the Exchequer what would be the yield if(a) the personal income tax allowances, (b) mortgage interest income tax reliefs and (c) employers' employees' and personal pension income tax reliefs were restricted to (a) 25 per cent. and (b) 20 per cent. income tax.
§ Mr. DorrellThe latest estimates of the direct revenue yields in a full year with the 1992–93 levels of allowances and tax rates are as follows:
Restriction to 25 per cent. £ million Restriction to 20 per cent. £ million (i) All main income tax allowances 1,500 6,800 (ii) Mortgage interest relief1 — 1,000 (iii) Pension contribution reliefs2 470 1,100 (iv) Combination of (i),(ii) and (iii) 2,100 9,000 1 Mortgage interest relief is currently restricted to the basic rate of tax. 2Employees' contributions to occupational pension schemes and contributions to personal pensions including retirement annuity premia and free-standing additional voluntary contributions. The yield from restricting the rate of relief on employers' contributions to pension schemes would depend on the method by which such contributions were allocated to individual employees.
No account has been taken of possible behavioural changes resulting from such restrictions.