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Personal Taxation

Volume 115: debated on Wednesday 29 April 1987

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asked the Chancellor of the Exchequer what is his estimate of the loss of revenue from a reduction of 1p in the standard rate of income tax in

Pre-tax profits £ million1 (Years to end March)
197819791980198119821983198419851986
British Aerospace 1981266505371-1582120151182
Cable and Wireless 19815559616489157190245295
Amersham International 1982645912141718
National Freight Consortium 198237441012172937
Britoil 1982244865506507315134
Associated British Ports 1983212-10615-71726
Enterprise Oil 198426831391113
Jaguar 19842-32105092121121
British Telecom 19845709361,0319901,4801,810
British Gas 1986803909712782
British Airways 1987185191195
1 All figures are taken from the relevant prospectuses and annual reports. They are given on a historic cost basis except those for Britoil (1982–85), Associated British Ports and British Gas, which are on a current cost basis.
2 Years to end December.
3 Report beginning October except for 1979 which is to end December.
4 Britoil began trading separately from BNOC in 1982. Separate figures for earlier years not available.
5 Figures for 1982–85 on current cost basis. 1986 figure is on historic cost basis: current cost figure not yet available.
6 For 8 months to 31 December 1983. Enterprise Oil began trading separately from British Gas in 1983, separate figures for earlier years not available.

Note: All figures to nearest number.

asked the Chancellor of the Exchequer if he will list all the state enterprises that have been moved into the private sector since 1979, together

1987–88 before counting allowances and reliefs other than the personal allowances; and if he will publish in the Official Report a table showing (i) the loss on earned and unearned income, respectively, (ii) the estimated saving in each allowance and relief, (iii) the net loss to the Exchequer and (iv) the distribution of the benefit by range of income and tax category.

If the basic rate of income tax were changed on income before deduction of tax reliefs, the direct revenue cost of reducing the rate by 1p would be about £1·5 billion in a full year at 1987–88 income levels. This estimate assumes that reliefs (such as capital allowances) which are taken into account in arriving at taxable profits for schedule D would continue to be deductible. The table shows the cost by ranges of gross income of taxpayers. Further information could be provided only at disproportionate cost.

Tax Unit's1 Gross IncomeDirect Revenue Cost
£ per annum£ million
Under 5,00040
5,000–10,000300
10,000–15,000400
15,000–20,000320
20,000–30,000280
Over 30,000160
1 Treating a married couple as a unit and combining the separate incomes.

asked the Chancellor of the Exchequer if he will list, for each state enterprise, the profits or losses for the three years before they were moved into the private sector and the profits or losses since privatisation.

The information requested is given in the table below for 11 major privatised companies.with the receipts obtained and the percentage shareholding that is still retained in any of those enterprises by the public sector.

Information on privatisation proceeds for 1981–82 to 1985–86 is set out in table 2·2 of the 1987 public expenditure White Paper, Cm 56-II. Figures for 1979–80 and 1980–81 are given in table 2·14 of the 1985 public expenditure White Paper, Cm 9428-II. In 1986–87, British Gas and British Airways were privatised. Total net receipts are £7,535 million from British Gas and £828 million from British Airways; both figures include instalment payments not yet made.The Government retain holdings of ordinary shares in British Telecom (49·8 per cent.) and BP (31·7 per cent.)