HC Deb 30 July 1974 vol 878 cc150-1W
Mr. Ralph Howell

asked the Chancellor of the Exchequer, on the basis of the figures of net weekly spending power given in reply to the Question by the hon. Member for Norfolk, North, on 15th May 1974 [OFFICIAL REPORT c. 464–70), what would be the likely effect on aggregate consumer demand if unemployment in the second half of the financial year were to increase by an average figure of 500,000, with average duration of unemployment limited to under three months in each case and whether aggregate consumer demand would rise or fall as a result.

Mr. Dell

Estimates on the basis stipulated could not be obtained except at disproportionate cost. It would be necessary to specify on scanty empirical evidence distributions of unemployment levels and savings ratio over a wide range of earnings and family size household categories. Moreover such an estimate would not be meaningful because a given rise in unemployment is typically associated with a much larger fall in employment, since a high proportion of those losing jobs will be married women and part-time workers who mostly do not register and who do not qualify for benefit. This is one reason why we would expect a rise in registered unemployment to lead to a fall in aggregate demand, even though on the assumptions made by the hon. Member the fall would be partly alleviated by repayment of income tax and other factors.

Mr. Mudd

asked the Chancellor of the Exchequer what is the average gross income per head of population and the average gross income for England and Wales, the South-West Region and Cornwall in 1970, 1971, 1972, 1973 and to the latest date for which figures are available.

£ per annum
England and Wales South-West Region Cornwall
1970–71 Average income 1,560 1,500 1,350
Income per head 610 560 450
1971–72 Average income 1,710 1,590 1,570
Income per head 660 590 540

1. The income figures used are derived from the Inland Revenue's Survey of Personal Incomes for 1970–71 and 1971–72. They refer to total net income and exclude non-taxable receipts, such as certain national insurance benefits as well as income below the exemption limit for tax. The limit for both years was £420. Total net income, which is income before tax, is income as reviewed for tax after all deductions but before deducting the personal reliefs or allowances. Information in the required form is not available for gross income. Average income is the average for those people with incomes over the exemption limit, counting married couples as one unit. Income per head is the average for the home resident population, and includes individuals of all ages whether they have an income or not.

2. Population figures refer to the resident population of each area at mid-1970, and mid-1971.

3. The income of taxpayers has as far as possible been allocated to the area of residence. However, the income of self-employed persons is allocated on a place of assessment basis and members of the Forces, Merchant Navy and those civil servants whose incomes cannot be allocated according to place of residence are included in the England and Wales figures only.

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