§ Mr. Denzil DaviesTo ask the Chancellor of the Exchequer (1) what would be the total aggregate cost in a full year of raising the upper limit of the lower rate income tax band from £3,200 to £10,000 and the upper limit of the basic rate band to £30,000 assuming no change in personal allowances from those announced in the Budget;
(2) what would be the total cost in a full year of raising the upper limit of the lower rate income tax band from £3,200 to £10,000 assuming no change in personal allowances from those announced in the Budget.
Dr. Sir George YoungBased on assumptions in the "Financial Statement and Budget Report" 1995–96, the full-year cost, at 1995–96 income levels, of extending the width of the lower-rate band to £10,000 is estimated to be £5.3 billion. If the basic rate limit were also increased to £30,000, the total cost would be £6.9 billion. These costs do not take into account any behavioural changes which might result for the introduction of the new regime.