§ Mr. Chris SmithTo ask the Chancellor of the Exchequer at what level of income(a) a single person and (b) a married man currently pays a greater proportion of their income in income tax and national insurance contributions than they did in equivalent circumstances in 1978–79.
§ Mr. Lilley[holding answer 13 March 1990]: Since income tax rates have been reduced and the main personal allowances increased by substantially more than the rate of inflation, taxpayers will now pay a lower proportion of their income in tax than in 1978–79 unless their incomes have risen even more rapidly than allowances. Average earnings have risen rather more than this.
For taxpayers of working age whose incomes have increased in line with average earnings, average rates of income tax and national insurance contributions are lower than in 1978–79 for everyone except some married men with earnings up to and including three quarters of the average. On the same basis, real take-home pay is higher than in 1978–79 at all levels of earnings.