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Income Tax

As I explained in my statement, I am proposing to increase the personal tax allowance that everyone gets. To that extent, the benefit is a flat-rate one that will go to all basic-rate taxpayers. As a result, 80 per cent. of people will find that their loss is completely offset or that they will do better than that. There are others whose loss is at least halved. At the pre-Budget report, when I set out proposals for future years, I want to do more, particularly for people on low incomes. When I looked at how we might deal with the problem, I saw that the difficulty of trying to isolate actual losses or set up a rebate system that took account of individual circumstances was such that doing those things would have taken a very long time. I also suspect that it would have been a very blunt-edged instrument. The approach that I have set out is more straightforward and simpler and has the benefit of getting money into the hands of people at an early opportunity, rather than our having to wait right up until the end of this financial year.