HC Deb 06 February 1968 vol 758 cc75-6W
Mr. John Hall

asked the Chancellor of the Exchequer in respect of which periods since 15th October, 1964, there has been an officially recommended norm for increases in wages and salaries; what it has been in each case; by how much in each period the actual increase in wages and salaries has exceeded the norm, expressed at an annual rate both in percentage and in money terms; and in respect of each period, what is his estimate of the increase in the standard rate of income tax required to yield an increase in revenue equal to the amount by which the rise in wages and salaries exceeded the norm.

Mr. Roy Jenkins

Cmnd. 2639 of April, 1965, laid down a norm of 3 to 3. per cent. as the appropriate figure for the average annual increase in money incomes per head. The norm was nil from July, 1966, to June, 1967 (although in the later period some increases in incomes could be justified in exceptional circumstances and increases deferred from the period of standstill also took effect).

Since 1st July, 1967, the policy has been that no one is entitled to a minimum increase and all increases have to be justified in accordance with the criteria of the current White Paper (Cmnd. 3235).

Between March, 1965, and June, 1966, the Ministry of Labour monthly index of average earnings increased at an average rate of about 7 per cent. or£650 million per annum more than the norm. Between June, 1966, and June, 1967, the index increased by 2 per cent., corresponding to about£400 million per annum. To raise these gross amounts in income tax in a full year would have required an increase of about 2s. 2d. for 1965–66 and 1 s. 7d. for 1966–67 in the standard rate of income tax which applied to the whole of company profits as well as to personal incomes in 1965–66, but only to personal incomes in 1966–67.