Personal Incomes (Hansard, 18 April 1978)

§ Mr. Ian Stewart
asked the Chancellor of the Exchequer, whether he will publish in the Official Report, for 1973–74 and for 1978–79, figures comparable to those

(a) (b) (c) (d) (e) (e)

Gross weekly earnings Income tax payable Employee's national insurance contributions Net income (including family allowance child benefit) Real net income at 1973–74 prices Real net income October 1977 prices

£ £ £ £ £ £

1. AVERAGE EARNINGS

1973–74 … … 44.80 7.30 2.60 35.80 35.80 69.30

1978–79 … … 90.00^* 18.00 5.90 71.30 34.50 66.60

2. TWICE AVERAGE EARNINGS

1973–74 … … 89.60 20.70 2.90 66.90 66.90 129.30

1978–79 … … 180.00^* 49.30 7.80 128.10 61.90 119.70

3. THREE TIMES AVERAGE EARNINGS

1973–74 … … 134.40 35.90 2.90 96.50 96.50 186.50

1978–79 … … 270.00^* 95.60 7.80 171.80 83.00 160.60

^* See Note 2.

Notes:

1. For 1973–74 the figures have been calculated on the same basis as those given for the years 1973–74 to 1977–78 in reply the hon. Member for Norfolk, South (Mr. MacGregor)—[Vol. 944, cols. 269–70; Vol. 945, col. 182.].

2. For 1978–79 average earnings have been notionally estimated as follows. On the basis that in October 1977 a man on average earnings had not yet received an increase in the current pay round, it may be assumed that his earnings will rise by a further 10 per cent. to October 1978 in accordance with the Government's guideline. It is assumed that the retail prices index will rise by 7 per cent. over the same period. It has been assumed that he is not contracted out of the graduated pension scheme. The rates of tax, national insurance contribution and child benefit are those proposed for 1978–79, averaged over the whole year.

§ Mr. Ian Stewart
asked the Chancellor of the Exchequer what percentage of average male national earnings was represented in 1973–74 and 1977–78, and is estimated to be represented in 1978–79 by the income tax threshold for a single person, married couple and a married
124W
given in his replies to the hon. Member for Norfolk, South (Mr. MacGregor). Official Report, 15th February 1978, col. 268 and 28th February 1978, col. 182 for (a) a figure for actual or estimated average adult male earnings, (b) the amount of tax payable on such a level of earnings by a married man with two children under 11 years of age, (c) the amount of employee's national insurance contribution, (d) the residual net income adjusted for child benefit, and (e) the real purchasing power of the residual net income as adjusted for inflation since 1973–74, together with similar figures for persons with twice and three times average earnings.

§ Mr. Robert Sheldon
, pursuant to his reply [Official Report, 12th April 1978], gave the following information:
The figures are as follows:
couple with one, two, three and four children, on a basis comparable with Written Answer, Official Report, 20th July 1977, c. 579–81.

§ Mr. Robert Sheldon
, pursuant to his reply [Official Report, 12th April 1978], gave the following information:
125W
The figures are as follows:

TAX THRESHOLD AS A PERCENTAGE OF AVERAGE EARNINGS

Per cent.

Single person Married couple Married couple with 1 child under 11 Married couple with 2 children under 11 Married couple with 3 children (2 under 11, 1 between 11 and 16) Married couple with 4 children (2 under 11, 2 between 11 and 16)

1973–74 … … 28.0 36.4 45.8 51.3 57.9 64.3

1977–78 … … 24.9 38.4 44.3 49.8 55.9 61.7

1978–79^* … … 23.6 36.8 41.1 45.1 49.7 54.0

^* See Note 2 below.

Notes:

1. The figures have been calculated on the same basis as those given in reply to the hon. Member for Norfolk, North (Mr. Howell)—[Volume 935, cols. 579–81]—except that the figures for 1977–78 have been revised to take account of the figure of average earnings of full-time male manual workers in October 1977. As previously, family allowances and child benefit have been included in the annual equivalents of average earnings where appropriate.

2. For 1978–79 the annual equivalent of average earnings has been notionally estimated as follows. On the basis that in October 1977 a man on average earnings had not yet received an increase in the current pay round, it may be assumed that his earnings will rise by a further 10 per cent. to October 1978 in accordance with the Government's guideline, it is assumed that the retail prices index will rise by 7 per cent. over the same period.

3. The tax thresholds are those proposed in ihe Budget speech and child benefit is the amount receivable in the whole year.

§ Mr. Ian Stewart
asked the Chancellor of the Exchequer whether, in the light of 1978–79 tax rates and allowances, he will publish a table in the Official Report showing, for 1973–74 and 1978–79 the effective rate of tax plus social security contributions for a man with two children aged under 11 years of age having income, all earned, equivalent to the national average earnings, twice the average and three times the average, on a

Earnings Effective rate of tax plus social security contributions Per cent.

1973–74 … Average earnings … … … 21.6

Twice average earnings … … … 26.1

Three times average earnings … … … 28.7

1977–78 … Average earnings … … … 24.4

Twice average earnings … … … 30.4

Three times average earnings … … … 37.4

1978–79 (see Note 2 below) … Average earnings … … … 25.0

Twice average earnings … … … 30.8

Three times average earnings … … … 37.6

Notes:

1. The figures have been calculated on the same basis as those given in reply to the hon. Member for Aylesbury (Mr. Raison)—[Vol. 938, col. 272–3]—except that the figures for 1977–78 have now been based on average earnings in October 1977.

2. For 1978–79 average earnings have been notionally estimated as follows. On the basis that in October 1977 a man on average earnings had not yet received an increase in the current pay round, it may be assumed that his earnings will rise by a further 10 per cent. to October 1978 in accordance with the Government's guideline. It is assumed that the retail prices index will rise by 7 per cent. over the same period. The rates of tax and national insurance contributions are those proposed for 1978–79.

3. It has been assumed that the employee is not contracted out of the graduated pension scheme in 1973–74 and 1978–79.

126W
basis comparable with that given in his reply to the hon. Member for Aylesbury (Mr. Raison) in the Official Report, 11th November 1977, c. 272.

§ Mr. Robert Sheldon
, pursuant to his reply [Official Report, 12th April 1978], gave the following information:
The figures for the married man with two children under 11 are as follows:
127W

§ Mr. Ian Stewart
asked the Chancellor of the Exchequer if he will publish a table on the same basis as his reply to the hon. Member for Norfolk, North (Mr. Howell)—Official Report, 2nd December 1977, c. 462, showing the effective rates of income tax plus national insurance contributions for each of a single person, a married couple, and a married couple

TAX AND NATIONAL INSURANCE CONTRIBUTIONS AS A PERCENTAGE OF AVERAGE EARNINGS, PLUS FAMILY ALLOWANCE/CHILD BENEFIT WHERE APPROPRIATE

Per cent.

Single person Married couple Married couple with 2 children aged under 11 Married couple with 4 children aged under 11

1960–61 … … … 19.0 14.0 6.8 3.2

1964–65 … … … 23.4 18.4 9.7 5.1

1973–74 … … … 28.2 25.8 21.6 18.6

1977–78 … … … 32.2 28.1 24.4 21.1

1978–79 (see Note 2 below) … … … 31.9 27.9 25.0 22.4

Notes:

1. The figures for 1973–74 and earlier years have been calculated on the same basis as those given in reply to the hon. Member for Norfolk, North (Mr. Howell)—[Vol. 940, cols. 461–2], and the hon. Member for Horsham and Crawley (Mr. Hordern)—[Vol. 939, col. 268].

2. For 1978–79 average earnings have been notionally estimated as follows: On the basis that in October 1977 a man on average earnings had not yet received an increase in the current pay round, it may be assumed that his earnings will rise by a further 10 per cent. to October 1978 in accordance with the Government's guideline. It is assumed that the retail prices index will rise by 7 per cent. over the same period. The figures of tax, national insurance contributions and child benefit are those for the whole year.

			(a)	(b)	(c)	(d)	(e)	(e)
			Gross weekly earnings	Income tax payable	Employee's national insurance contributions	Net income (including family allowance child benefit)	Real net income at 1973–74 prices	Real net income October 1977 prices
			£	£	£	£	£	£
1. AVERAGE EARNINGS
1973–74	…	…	44.80	7.30	2.60	35.80	35.80	69.30
1978–79	…	…	90.00^*	18.00	5.90	71.30	34.50	66.60
2. TWICE AVERAGE EARNINGS
1973–74	…	…	89.60	20.70	2.90	66.90	66.90	129.30
1978–79	…	…	180.00^*	49.30	7.80	128.10	61.90	119.70
3. THREE TIMES AVERAGE EARNINGS
1973–74	…	…	134.40	35.90	2.90	96.50	96.50	186.50
1978–79	…	…	270.00^*	95.60	7.80	171.80	83.00	160.60
^* See Note 2.
Notes:
1. For 1973–74 the figures have been calculated on the same basis as those given for the years 1973–74 to 1977–78 in reply the hon. Member for Norfolk, South (Mr. MacGregor)—[Vol. 944, cols. 269–70; Vol. 945, col. 182.].
2. For 1978–79 average earnings have been notionally estimated as follows. On the basis that in October 1977 a man on average earnings had not yet received an increase in the current pay round, it may be assumed that his earnings will rise by a further 10 per cent. to October 1978 in accordance with the Government's guideline. It is assumed that the retail prices index will rise by 7 per cent. over the same period. It has been assumed that he is not contracted out of the graduated pension scheme. The rates of tax, national insurance contribution and child benefit are those proposed for 1978–79, averaged over the whole year.

TAX THRESHOLD AS A PERCENTAGE OF AVERAGE EARNINGS
Per cent.
			Single person	Married couple	Married couple with 1 child under 11	Married couple with 2 children under 11	Married couple with 3 children (2 under 11, 1 between 11 and 16)	Married couple with 4 children (2 under 11, 2 between 11 and 16)
1973–74	…	…	28.0	36.4	45.8	51.3	57.9	64.3
1977–78	…	…	24.9	38.4	44.3	49.8	55.9	61.7
1978–79^*	…	…	23.6	36.8	41.1	45.1	49.7	54.0
^* See Note 2 below.
Notes:
1. The figures have been calculated on the same basis as those given in reply to the hon. Member for Norfolk, North (Mr. Howell)—[Volume 935, cols. 579–81]—except that the figures for 1977–78 have been revised to take account of the figure of average earnings of full-time male manual workers in October 1977. As previously, family allowances and child benefit have been included in the annual equivalents of average earnings where appropriate.
2. For 1978–79 the annual equivalent of average earnings has been notionally estimated as follows. On the basis that in October 1977 a man on average earnings had not yet received an increase in the current pay round, it may be assumed that his earnings will rise by a further 10 per cent. to October 1978 in accordance with the Government's guideline, it is assumed that the retail prices index will rise by 7 per cent. over the same period.
3. The tax thresholds are those proposed in ihe Budget speech and child benefit is the amount receivable in the whole year.

		Earnings	Effective rate of tax plus social security contributions Per cent.
1973–74	…	Average earnings	…	…	…	21.6
		Twice average earnings	…	…	…	26.1
		Three times average earnings	…	…	…	28.7
1977–78	…	Average earnings	…	…	…	24.4
		Twice average earnings	…	…	…	30.4
		Three times average earnings	…	…	…	37.4
1978–79 (see Note 2 below)	…	Average earnings	…	…	…	25.0
		Twice average earnings	…	…	…	30.8
		Three times average earnings	…	…	…	37.6
Notes:
1. The figures have been calculated on the same basis as those given in reply to the hon. Member for Aylesbury (Mr. Raison)—[Vol. 938, col. 272–3]—except that the figures for 1977–78 have now been based on average earnings in October 1977.
2. For 1978–79 average earnings have been notionally estimated as follows. On the basis that in October 1977 a man on average earnings had not yet received an increase in the current pay round, it may be assumed that his earnings will rise by a further 10 per cent. to October 1978 in accordance with the Government's guideline. It is assumed that the retail prices index will rise by 7 per cent. over the same period. The rates of tax and national insurance contributions are those proposed for 1978–79.
3. It has been assumed that the employee is not contracted out of the graduated pension scheme in 1973–74 and 1978–79.

TAX AND NATIONAL INSURANCE CONTRIBUTIONS AS A PERCENTAGE OF AVERAGE EARNINGS, PLUS FAMILY ALLOWANCE/CHILD BENEFIT WHERE APPROPRIATE
Per cent.
				Single person	Married couple	Married couple with 2 children aged under 11	Married couple with 4 children aged under 11
1960–61	…	…	…	19.0	14.0	6.8	3.2
1964–65	…	…	…	23.4	18.4	9.7	5.1
1973–74	…	…	…	28.2	25.8	21.6	18.6
1977–78	…	…	…	32.2	28.1	24.4	21.1
1978–79 (see Note 2 below)	…	…	…	31.9	27.9	25.0	22.4
Notes:
1. The figures for 1973–74 and earlier years have been calculated on the same basis as those given in reply to the hon. Member for Norfolk, North (Mr. Howell)—[Vol. 940, cols. 461–2], and the hon. Member for Horsham and Crawley (Mr. Hordern)—[Vol. 939, col. 268].
2. For 1978–79 average earnings have been notionally estimated as follows: On the basis that in October 1977 a man on average earnings had not yet received an increase in the current pay round, it may be assumed that his earnings will rise by a further 10 per cent. to October 1978 in accordance with the Government's guideline. It is assumed that the retail prices index will rise by 7 per cent. over the same period. The figures of tax, national insurance contributions and child benefit are those for the whole year.