§ Mr. KirkwoodTo ask the Chancellor of the Exchequer if he would estimate the rates of child benefit for the first and subsequent children from April 1999 required to ensure that if a higher rate taxpayer in receipt of child benefit paid tax on it at(a) the higher rate or (b) the standard rate, the net cash amount of benefit received remained at the level already announced from April 1999; if he would further estimate (1) the gross annual programme cost of increasing child benefit to those levels and (2) what would be the net cost to the Exchequer of raising child benefit to those levels (i) with
Rates of child benefit From April 1999 First child (£) Subsequent children (£) Gross cost (£ billion) Net cost with no taxation (£ billion) 14.40 9.60 — — (a) To give equivalent net cash amount when taxed at the higher rate of 40 per cent. 24.00 16.00 5.5 4.4 (b) To give equivalent net cash amount when taxed at the basic rate of 23 per cent. 18.70 12.45 2.4 1.9 If all child benefit payments to those mothers or lone fathers who were liable at the higher rate of 40 per cent. were taxable, the yield for 1999–2000 would be about £60 million with the child benefit rates at (a) and about £50 million with the child benefit rates at (b). Taxing child benefit for higher rate taxpayer recipients has no consequential effects on benefits.