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Personal Allowances

Volume 167: debated on Monday 12 February 1990

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To ask the Chancellor of the Exchequer what would be the cost of increasing all personal allowances by the current increase in average earnings of 9·25 per cent.

At 1990–91 levels of income, the direct revenue cost in a full year of increasing all personal allowances by 9·25 per cent. on their 1989–90 levels is estimated to be about £2,240 million. The additional cost of increasing the basic rate limit by 9·25 per cent. is about £430 million in a full year. The costs falling in 1990–91 would be £1,720 million and £250 million respectively. Estimates are based on a projection of the 1987–88 survey of personal incomes and are provisional.