HC Deb 10 November 1970 vol 806 cc138-9W
Mr. William Hamilton

asked the Chancellor of the Exchequer if he will give a breakdown of the statistics showing that a family with two children, with an income of £1,000 a year, will be better off, or worse off, as a consequence of the proposed reduction in income tax and the proposed increased charges for school meals, prescription and other health charges, school milk and welfare milk, and increased rents.

Mr. Maurice Macmillan

Entitlement to benefits and liability to income tax varies with the age of children. In brief a typical family with two children of school age and an income of £1,000 a year in 1971–72 will benefit from these measures by some £12 to £20.

At an income of £1,000 a year such a family will not pay charges for school meals, prescription charges or dental or ophthalmic charges. This assumes income tax and national insurance contributions of just over £117 a year and rent, rates and other expenditure of a little over £172 a year—broadly in line with average experience—leaving net income of about £710 a year. At present without the increase in the remission limits announced on 27th October, such a family with two children of school age is liable to pay school meal charges in respect of one child, and at the charge now in force this amounts to 8s. 9d. a week in term time or about £17 a year.

The withdrawal of free school milk will not affect family income in the case of children up to seven or over 12. For families with a child or children between age seven and age 12 purchase of milk in place of free school milk would cost a little over £3 a year for each child affected.

The proposals for the reform of housing finance will not affect a family's income in 1971–72.

The reduction of 6d. in the standard rate of income tax will benefit such a family by a little over £3 a year.

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