§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what is the annual expected cost to the Exchequer of the tax reliefs on(a) personal equity plans, (b) tax-exempt special savings accounts and (c) national savings products, in (i) 1995–96 and (ii) 1996–97. [22776]
§ Mr. Jack[holding answer 26 March 1996]: The latest estimates are in the table.
Estimated total cost of tax relief 1995–961 2 £million 1996–971 2 3 £ million PEPs4 450 650 TESSAs 450 350 National Savings Products5 350 350 1Provisional 2These figures are tentative and subject to a wide margin of error. They have been rounded to the nearest £25 million. 3The cost will fall in 1996–97 due to the reduction in the basic rate of income tax on savings from 25 per cent. to 20 per cent. and follow-up accounts starting with only the capital (but none of the interest or bonuses) from the first TESSA. 4Including the CGT cost of capital gains within Personal Equity plans. 5Cost of exemption of interest on National Savings Certificates including index-linked Certificates, and first £70 of National Savings bank ordinary account interest.