asked the Chancellor of the Exchequer if he will update for the 1983–84 tax year the information on tax cuts provided in his reply of 21 December 1981 to the hon. Member for Hornchurch, (Mr. Squire) Official Report, c. 300.
The estimated full-year cost at 1983–84 income levels of a reduction of 1p in the basic rate of income tax—after indexation of allowances and thresholds by 6 per cent.—is given as £975 million in table 5·5 of the autumn statement 1982. The effect of this change and that of increasing the main personal allowances or child benefit at the same overall cost is shown in the following table. The calculations have been carried out on the same basis as in the previous answer. Average earnings are for full-time adult males—all occupations. For illustration, growth of 6† per cent. between 1982–83 and 1983–84 has been assumed.
|Increase in net income (£ per week)|
|Level of earnings||1p cut in basic rate||Increased personal allowances||Increased child benefit for two child family|
|1½ x Average||2·12||0·81||3·50|