HM Treasury News Release

# = Pounds Sterling

6 April 1999

NEW 10P RATE OF TAX MEANS A BETTER DEAL FOR THE PEOPLE OF BRITAIN

The new 10p rate of tax comes into force today - the lowest
starting rate of tax for over 35 years.

Chancellor Gordon Brown today welcomed the new rate of tax:

"My Budget in March introduced tax cuts for a purpose - to
make work pay, encourage enterprise and support families.
And so from today, all taxpayers will see the benefit of the
promises the Government has made to the British people. We
are delivering on those promises to get a better deal for
Britain.

"The new 10p rate - the lowest starting rate of tax in
Britain for more than 35 years - will make work pay and help
people, especially those who are low-paid, to keep more of
the money that they earn.

"People will see the benefit of the new 10p tax rate in
their first pay packet after 17 May - just a few weeks from
now.

"As a result of the new 10p rate, 1.8 million low-paid
workers will see their tax bills halved as a result - a gain
of up to #150 a year. And from today too, every worker in
Britain who pays national insurance will have their tax
bills cut by #65 a year, because of the reforms we have made
to national insurance contributions.

"When we make promises, we keep them."

NOTES TO EDITORS
People will, from 17 May, see the benefit of the 10p rate of tax
in their pay packets. It will be backdated to 6 April.

Some examples of those who will benefit are:

- a single person earning #6000 will gain #145 in 1999-00
- a one-earner couple earning #20,000 will gain #60 in 1999-00
- a two-earner couple earning #15,000 (#8000 and #7000) will
together gain #200 in 1999-00
- a two-earner couple earning #12,000 (both earning #6000) will
together gain #290 in 1999-00.