§ 12. Mr. EasthamTo ask the Chancellor of the Exchequer how much he estimates families on 75 per cent. or less of average earnings can expect to pay in income tax and national insurance from this April; and what the figure was for 1978–79.
§ Mr. DorrellA single earner family on 75 per cent. of average earnings will pay about £68 a week in income tax and national insurance contributions next year. That compares with about £79 a week if the 1978–79 tax regime had still been in force arid indexed for inflation.
§ Mr. EasthamSeveral times this afternoon the Minister has mentioned the direct purchasing power of the average family. May I remind him that average purchasing power, with VAT at the 1979 level, was £2.49 and that the same purchasing power for the average family with VAT in 1994–95 will be £21.92?
§ Mr. DorrellI do not think that the hon. Gentleman could have heard the answer that I gave him. He asked me how much the tax burden had gone up, by implication, as a result of the changes that my right hon. and learned Friend announced, compared with what the position would have been in 1978–79. The answer that I gave him, which he very understandably did not follow up, was that our tax burden, the direct tax burden—[HON. MEMBERS: "Ah."] That was the question which I was asked and to which I gave an answer. The direct tax burden next year, on a 1978–79 basis, would have been £79. It will, in fact, be £68.