§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what estimate he has made of the annual cost of extending the application of the 10p tax rate to include income from investment; and if he will make a statement. [77685]
§ Dawn Primarolo[holding answer 19 March 1999]: The 10p starting rate has been introduced to improve work incentives and help make work pay. Income from investment is already taxed generously. Most savers will continue to enjoy the benefit of the lower rate at 20p on their savings rather than the basic rate at 23p (22p from April 2000). And our introduction of Individual Savings Accounts in April this year means all savers can investment substantial amounts tax-free each year.
The cost of extending 10p rate band to include income from investment would be £85 million for 1999–2000.