Income Tax

To ask the Chancellor of the Exchequer what estimate he has made of the full-year cost to the Exchequer for (a) 2009-10, (b) 2010-11 and (c) 2011-12 of reducing the (i) starting and (ii) basic rate of tax on savings income to zero. (251189)

The full year cost for each of the three years is shown in the table. The estimates are based on the 2006-07 Survey of Personal Incomes projected forward in line with Budget 2009 assumptions. The figures exclude any estimate of behavioural response.

*£ million*
	2009-10	2010-11	2011-12
Zero starting rate for savings income	20	55	80
Zero basic rate for savings income¹	510	1,570	2,440
¹ Additional costs assuming the starting rate for savings income is zero.

Volume 493: debated on Tuesday 2 June 2009