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Personal Allowances

Volume 938: debated on Thursday 10 November 1977

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asked the Chancellor of the Exchequer what further increase in the personal allowance for single persons and married couples, over and above the level announced in his recent statement, would be necessary to bring these allowances to the level operative in 1972–73, adjusted by the cost of living index since that date.

£320 and £195, respectively, on the basis of the change in the index of retail prices between September 1972 and September 1977.

These figures allow for the effects of earned income relief in 1972–73.

Will the Chief Secretary accept that, over the intervening years, there has been considerable suffering because of the lag behind of the level of taxation threshold, and that many people who could not afford to pay income tax have been drawn in? In view of that, will the right hon. Gentleman give an assurance that there will be an annual review of the level of income tax threshold and, if possible, an indexing of that to the cost of living index?

Perhaps the hon. Gentleman did not notice it, but during the passage of last year's Finance Bill we accepted an amendment that will result in such an inquiry.

Arising out of the Chief Secretary's answer, and so that the House can see the problem in its true perspective, will he do the same exercise in relation to the year 1973–74, and also in relation to the higher rate threshold?

Yes, if the hon. and learned Gentleman tables a Question to that effect.

Is my right hon. Friend aware that the level of family support has been declining systematically? Will he undertake to index child benefits?

My right hon. Friend is being rather less than fair to the Government which she supports. She will know that there will be a substantial increase in child benefits next April—a matter in respect of which she has done a great deal to help. I am personally happy to pay tribute to her for that work, and I hope that she will pay a tribute to the Government for what they have done.