HC Deb 11 November 1977 vol 938 cc267-8W
Mr. Tebbit

asked the Chancellor of the Exchequer, pursuant to his reply of 24th June, what has been the fall in net take-home pay, in real terms, of a married worker with two young children drawing the average industrial wage, since October 1974, and since March 1974, respectively; and how much extra in total gross pay in current terms, he would have had to earn since each of those dates to maintain the purchasing power of his take-home pay at constant levels.

Mr. Robert Sheldon:

Taking into account the changes in the retail prices index between (a) March 1974, (b) October 1974 and August 1977, the real net income of a married man with two children not over 11, drawing the average industrial wage has fallen by 5.8 per cent. and 8 per cent., respectively.

For his real net income in August 1977 to have retained its purchasing power at the earlier date would have required increases in gross pay of 8.2 per cent. and 11.5 per cent., respectively.

The average industrial wage has been taken to be the New Earnings Survey estimates of the average earnings in April of full-time adult male manual workers updated by the monthly index of average earnings to give estimates for March 1974, October 1974 and August 1977, the latest month for which an index figure is available.

The prices index used is the General Index of Retail Prices —all items.

The national insurance contribution rates used are those in operation in each of the months given and assume that the employee was "not contracted out" of the graduated pension scheme in March and October 1974.

The tax figures take account of the Chancellor's proposals of 26th October 1977.