§ Mr. Ralph Howellasked the Chancellor of the Exchequer how much it would cost at 1978 prices to introduce a tax credits scheme on the lines of the 1972 Green Paper with credits equal to (a) supplementary benefit entitlement levels and (b) 120 per cent. supplementary benefit entitlement levels, including, in each case, an allowance for housing costs.
501W
§ Mr. Robert SheldonThis information is not available and could not be provided without a disproportionate expenditure of time and resources. The cost of introducing a tax credit scheme on the lines of that proposed by the previous Government has, however, been estimated at £6 billion in current prices; and since the credit levels requested by the hon. Member would be substantially higher than in such a scheme, the cost would be correspondingly greater.
PERCENTAGE OF EARNINGS ABSORBED BY INCOME TAX AND EMPLOYEES' SOCIAL SECURITY CONTRIBUTIONS Average United Kingdom earnings (£4,706) Per annum 2 times average United Kingdom earnings (£9,412) Per annum 3 times average United Kingdom earnings (£14,118) Per annum Belgium … … 17.2(17.7) 26.8(27.8) 32.3(33.9) Denmark … … 7.7(17.8) 16.8(33.9) 23.5(42.9) France … … 9.4 11.8 14.8 Germany … … 22.8 24.3 28.0 Ireland … … 18.7 30.4 40.3 Italy … … 17.6 25.1 29.3 Luxembourg … … 12.0 17.0 22.7 Netherlands … … 24.0 29.5 35.0 United States of America … … 8.7 (8.7) 17.0(19.1) 20.1(23.8) Australia … … 11.8 24.5 32.2 Japan … … 7.8 (8.1) 11.1 (13.7) 11.7(16.4) United Kingdom … … 26.1 30.6 36.1 Notes:
1. Figures are for a married man with two children under 11. It is assumed that all income is employment income of the husband. As in the previous question income from child benefits has not been taken into account.
2. United Kingdom average earnings are the April 1977 figures for all full time workers from the new earnings survey updated to April 1978 in line with the increase in average earnings. The tax deductions for the United Kingdom reflect the amendments made during the passage of the Finance Bill through the House. The exchange rates used are those at 15th April 1978.
3. Figures in brackets include local income taxes:
Belgium: at the rates which apply to the majority of the population.
Denmark: at the Copenhagen rate.
United States of America: at the Californian rate.
Japan: at the rates which apply to the majority of the population.
4. Personal reliefs, minimum expenses deductions, employment income reliefs, other flat rate reliefs and deductible social security contributions, have been taken into account.