To ask the Chancellor of the Exchequer what is his estimate of the cost of reducing the basic rate of income tax to 20 per cent.; and if he will make a statement.

The cost of reducing the basic rate of income tax from 25 per cent. to 20 per cent. in 1988–89 is estimated to be £6·4 billion in 1988–89 and £8 billion in 1989–90. These estimates include the costs of the consequential reduction in the rate of advance corporation tax.