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Treasury

Answer

Mr. Gibb: To ask the Chancellor of the Exchequer if he will recalculate the figures used in paragraph 1.26 of the Red Book taking into account his July 1997 Budget and using an assumption for private car use of 8,300 miles in an average 1600cc car. [80855] Dawn Primarolo: The impact of Budget 97, Budget 98 and Budget 99 measures on households is as follows: over 20 million households gain, of which 7 million are households with children and 7 million are pensioner households; on average, households will be £350 a year better off; families with children will on average be £690 a year better off; poorer families will also benefit: 700,000 children will be taken out of poverty; working households will on average be £410 a year better off; the new 10p rate of tax will halve the tax bill for 1.8 million, of whom 1.5 million are low-paid employees; the Working Families Tax Credit will on average give low earning families an extra £24 a week, compared with Family Credit. All the figures are relative to indexation and are in 1999-2000 prices. They reflect the impact on disposable income of measures included in the 1999, 1998 and July 1997 Budgets and taking effect over the four years from 1998-99, plus the impact of the national minimum wage. They are based on data from the ONS Family Expenditure Survey, the DSS Family Resources Survey and Inland Revenue's Survey of Personal Incomes. Compared with the Red Book, the only extra measure included is the cut in the mortgage interest relief (MIR) tax credit rate from 15 per cent. to 10 per cent. which was announced in the July 1997 Budget and came into force in April 1998. Estimating the impact of indirect taxes is imprecise as spending patterns vary widely between households with the same composition and income, with the consumption of the majority of goods and services far from universal. For example, just over half the adult population are in households paying vehicle excise duty.

Secondary information

Type

Written question

Reference

331 c336-7W; 80855

Session

1998-99

Subjects

Cars Excise duties Households Income Taxation Budget July 1997 Disposable income

Contains statistics

Yes