HC Deb 19 November 1987 vol 122 cc649-50W
Mr. Squire

To ask the Secretary of State for Social Services if he will publish figures for the numbers of lower-paid families, with and without children, whose marginal tax rates including benefit withdrawal will be(a) 90 to 100 per cent., (b) 80 to 90 per cent., (c) 70 to 80 per cent., (d) 60 to 70 per cent., (e) 50 to 60 per cent. and (f) 40 to 50 per cent. after the implementation of the Social Security Act 1986 in April 1988, assuming that in 1988–89 personal tax allowances are raised in line with inflation and the basic rate of tax is maintained at 27 per cent.

Mr. Scott

The estimated numbers of families with children, and of couples and single people without children, affected by the various marginal tax rates quoted are shown in the table. The main assumptions are similar to those used in the tables on the "Impact of the Reformed Structure of Income-Related Benefits", published at the time of the uprating statement on 27 October. The marginal tax rates are calculated on the sum of extra income tax and employee's national insurance—assumed as 9 per cent. — and the amounts by which income-related benefits are reduced for every extra £1 of gross earnings. To the extent that no allowance has been made for those employees who pay national insurance either at the lower contracted-in rates of 5 per cent. and seven per cent. or at contracted-out rates, the estimates are overstated. The figures should therefore only be taken as illustrating likely broad orders of magnitude.

Thousands—Great Britain
Total marginal rate of deduction (per cent.) per £1 of extra gross earnings Families with children1 Couples and single people without children1
Above 90 60 10
80 but less than 90 370 10
70 but less than 80 75 20
60 but less than 70 3 0
50 but less than 60 0 0
40 but less than 502 n.a. n.a.
1 Heads of tax units only.
2 Estimates not readily available.
3 Fewer than 5,000.