§ Dr. Owen
asked the Chancellor of the Exchequer, in order for net weekly spending power to be maintained over the year May 1980 to May 1981, what would the rise in 226W gross weekly earnings for households receiving 60 per cent. of average male earnings need to have been for (a) a single person, (b) a married couple, (c) a couple with one child, (d) a couple with two children, (e) a couple with three children and (f) a couple with four children.
§ Sir Geoffrey Howe
During the period specified the retail prices index rose by 11.7 per cent. The following rises in gross earnings would have increased net income by that percentage:
per cent. Single person 15.5 Married couple, no children 16.5 Married couple, one child 16.0 Married couple, two children 15.4 Married couple, three children 14.8 Married couple, four children 5.0 It should not, however, be assumed that net incomes would have been maintained in real terms if earnings in the economy as a whole had in fact increased at the rates shown above.
(1) Income tax has been calculated on the assumption that households have no allowances other than personnal allowances. For the married couples it is assumed that only the husband is earning.
(2) The couple with four children would not have been eligible for FIS in 1980, but would have been in 1981. This explains the small increase needed in their gross earnings to maintain constant real net income.