§ Mr. Parkinson
asked the Chancellor of the Exchequer, what is the latest estimate of the figure for a top salary, as defined by the Financial Secretary to the Treasury in the debate on the Finance Bill 1976, Official Report, 11 May 1976, c. 367–9, and the latest figure for the ratio between a man on average earnings and the man on a top salary.
TAX AS A PERCENTAGE OF INCOME BEFORE TAX Groups of incomes 1952 1964 1970–71 1974–75 Top 1 per cent. … … … 49½ 41 44½ 47 Next 9 per cent. … … … 15 16½ 22½ 23½ Next 40 per cent. … … … 5½ 8½ 15 17½ Lower 50 per cent. … … … 1½ 3½ 6 8 Bottom 20 per cent. … … … 0 0 0 1
Income is defined to include taxable income from all sources, less deductions such as mortgage interest allowable for income tax, together with non-taxable social security benefits, other current grants from public authorities and some items of income in kind—e.g. luncheon vouchers. Employers' national insurance contributions and the imputed rent of owner-occupiers are not included. The information about taxable income is derived from the Inland Revenue's survey of personal incomes. The income-receiving unit used in the distributions counts married couples as one. The average rates of tax for 1952, 1964 and 1970–71 include liability to surtax as well as to income tax.
For 1952 and 1964 the tax rates current in the fiscal years 1952–53 and 1964–65 respectively have been applied to the income in the calendar year. The 1952 estimates are based upon a projection from the 1949–50 survey of incomes and are less reliable than the estimates for the other years.374W
§ Mr. Robert Sheldon
As I stated in that debate, it is open to argument what figure one should choose as a top salary. The figure of £30,000 at that time was typical of top salaries. The gross income was 8.06 times average earnings, and net income for a married man with two children under 11 was 3.88 times average earnings. A comparable figure in 1978–79 would be about £40,000.