asked the Chancellor of the Exchequer what would be the loss to the revenue if all widows in receipt of State benefits were allowed to earn (a) £3,000 and (b) £3,500 before their pensions were taken into account for tax purposes.
If my hon. Friend has in mind a scheme where income, whether earned or unearned, can be received up to the quoted levels, before State benefits become taxable, the cost would be of the order of £150 million at 1979–80 income levels. This assumes that the full pension would become liable to tax immediately the limit was passed. The difference in the cost between levels of £3,000 and £3,500 would be some £10 million. Information on which to base a more precise estimate is not available.