asked the Chancellor of the Exchequer what best approximate estimate he has made of the loss each year to the Treasury in tax revenue of cutting 10 per cent. off marginal rates of income tax each year for three years.

The full-year cost of reducing the income tax rates by 10 per cent. at 1980–81 income levels would be about £8·5 billion. The new rates would then be 20 per cent., 35 per cent., 40 per cent., 45 per cent. and 50 per cent. The cost of further reductions in later years would depend on incomes and allowances in those years.