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Income Tax

Volume 129: debated on Tuesday 15 March 1988

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To ask the Chancellor of the Exchequer what additional annual income net of tax and national insurance would result from (a) a 2 pence cut in the basic rate of income tax and (b) the reduction of all high rate income tax bands to 40 per cent. for (i)a person, (ii)an income taxpayer, (iii)a household and (iv)average family of four.

[pursuant to his reply, 8 February 1988, c. 88]: I regret that the table given with my reply to

Increase in income after tax and national insurance (£ per annum) compared with indexation in 1988–89
Multiple of average male earnings1
Increase derived from:½¾11½25
(a) 2 pence cut in basic rate
(i)single77141204331372372
(ii)married couple wife not earning148112176303372372
(iii)married couple wife earning282188294534658744
(b) reduction of all higher rates of income tax to 40 per cent.
(i)single875,971
(ii)married couple wife not earning155,685
(iii)married couple wife earning2877,794
1 Average male earnings assumed to be £244·70 per week; an increase of 6·5 per cent. on 1987–88 in line with the assumptions used by the Government Actuary for reviewing National Insurance contributions (paragraph 3.02 of the Autumn Statement 1987).
2 Assuming that the wife's earnings are the same multiple of average earnings as her husband's.