§ Mr. Nicholas BrownTo ask the Chancellor of the Exchequer if he will publish a table showing the yield of restricting(a) the personal tax allowance, (b) the married couple's allowance and (c) the age allowances and the major tax reliefs to (i) the basic rate of tax and (ii) the lower tax rate of 20 per cent. in 1993–94.
§ Mr. DorrellThe latest estimates of the direct revenue yields in a full year at 1993–94 levels of income and using the autumn statement assumption of a 3.25 per cent. increase in 1992–93 levels of allowances and thresholds are as follows:
Restriction to 25 per cent. £ million Restriction to 20 per cent. £ million Personal allowance (excluding age related addition) 1,100 5,200 Married couple's allowance 320 1,100 Age allowances1 0 100 Pension contribution reliefs2 480 1,150 1 The higher levels of the age-related personal and married couple's allowance given to those aged 65 and over subject to the income limit. 2 Employees' contributions to occupational pension schemes and contributions to personal pensions including retirement annuity premia and free standing additional voluntary contributions. Mortgage interest relief is currently restricted to the basic rate of tax. Restricting it to 20 per cent. would yield £1,000 million in 1992–93 assuming interest rates remain at current levels for the rest of the year. The yield for 1993–94 has not been shown since it would depend on the pattern of borrowing, the eligibility of borrowers for mortgage interest tax relief, tax rates and interest rates in that year.
No account has been taken of possible behavioural change resulting from such restrictions, and the figures shown represent the yield from restricting each allowance separately. if two or more allowances were restricted, the total yield would be greater than the sum of the figures for individual allowances.