§ Mr. Ralph Howellasked the Secretary of State for Social Services how many wage/salary earners are currently estimated to be within the "poverty trap".
GREAT BRITAIN—AUGUST 1974 Marginal net benefit from £1 increase in earnings Negative Up to 24p increase 25–49p increase Families with children, head in full-time employment: Number (thousands) … … … … 50 150 240 Percentage of all families … … … … 1 2 4 Notes
(i) Only families with children with the head in full time employment have been considered. These include both one parent and two parent families. In the population there are about 6.5 million such families. Estimates for childless families are not available.
(ii) Estimates are subject to sampling error.
(iii) The calculation has taken account of income tax, national insurance contributions, family income supplement, rent and rate rebates, and the value of free school meals and free welfare milk
(iv) Families subject to higher than the standard rate of tax have been excluded.
(v) The estimates are based on the assumption that tax and benefits change immediately the pay rise is given. This is unlikely to happen in practice—for example, family income supplements, free school meals and free welfare milk are awarded for periods of 52 weeks. The practical effect over time of an increase in earnings will also depend on other factors including any intervening changes in tax rates or allowances, national insurance contributions and the income limits for benefits.