§ Mr. Marlow
asked the Chancellor of the Exchequer what was the effective percentage rate of stoppage, namely income tax plus national insurance, on the taxable income, after allowances, of a married householder with an average mortgage commitment earning: £4,000, £4,500, £5,000, £5,500, £6,000, £6,500, £7,000, £7,500, £8,000, £8,500, £9,000, £9,500, £10,000, £10,500, £11,000, £11,500, and £12,000 gross income as at 1st January 1980; what will be the effective percentage rate of stoppage in each case at 1 January 1981 where each earnings figure has been inflated by the rate of increase in average earnings and the 172W quotient represents taxable income and assumes for calculation purposes only that taxable income is a similar proportion of gross income as previously; and what is the difference between the two figures.
§ Mr. Peter Rees
[pursuant to his reply, 15 January 1981, c. 626.] If I understand my hon. Friend's question correctly, married men earning £4,000 and £12,000 in September 1979 whose income increased in September 1980 in line with the increase in average earnings, would pay tax plus national insurance contributions representing the following percentages of gross earnings.
Percentage of gross earnings: Sept 1979 Sept 1980 Difference % % % £4,000 15.3 17.2 1.9 £12,000 26.7 27.6 0.9
Each of the calculations assumes that mortgage interest relief is given on an outstanding mortgage of £7,100—the average for 1979.
The increase in average earnings between September 1979 and September 1980 was 22.6 per cent., as measured by the monthly earnings index—0three month moving average of seasonally adjusted figures. The increase from January 1980 to January 1981 is not yet known.