§ Mr. WebbTo ask the Chancellor of the Exchequer what would be the effect of(a) introducing a 10 pence starting rate of tax on the first £1,000 of taxable income and (b) spending the same amount on increasing non-aged personal allowances while holding the top of the 20 pence band at its present level, on individuals with gross weekly income of (i) under £100 per week, (ii) £100 to £149 per week, (iii) £150 to £199 per week and (iv) £200 per week or more. [19033]
§ Dawn Primarolo[holding answer 4 December 1997]: It is estimated that, in 1998–99, introducing a new lop starting rate on the first £1,000 of taxable income would cost the same as increasing non-aged personal allowances by about £400. Information is not available on the Survey of Personal Incomes on gross weekly income, therefore 476W annual total income has been used instead. Average annual gains are given in the table.
Average annual gains (£) Range of annual total income (£) New 10 pence rate1 on first £1,000 of taxable income Increase non aged personal allowances by £400 0–5,200 50 60 5,200–7,800 90 80 7,800–10,400 100 90 10,400+ 100 100 1 Assuming that the new 10 pence band would apply to all taxable income, so that the rates for savings income would be 10 per cent., twenty per cent, and 40 per cent.