Marginal Tax Rates (Hansard, 25 February 1993)

§ Mr. Dewar
To ask the Secretary of State for Social Security how many people faced marginal tax rates(a) including and (b) excluding social security of over (i) 40 per cent., (ii) 50 per cent., (iii) 60 per cent., (iv) 70 per cent., (v) 80 per cent., (vi) 90 per cent. and (vii) 100 per cent. in each year since 1978–79.

§ Mr. Burt
Such information as is available is in the tables.

Number of people with marginal deduction rates including social security (thousands)

Per cent. 1985–86 1988–89 1989–90 1990–91 1991–92 1992–93

100+ 70 0 0 0 0 0

90+ 130 45 45 45 55 75

80+ 290 345 210 235 205 250

70+ 290 515 415 395 400 500

60+ 450 515 420 395 405 510

50+ 680 515 420 395 405 510

40+ n.a. n.a. 455 665 435 520

Notes:
1. Figures for 1985–86 to 1991–92 are for benefit units where at least one partner works 24 hours or more.
2. Figures for 1992–93 are based on benefit units where at least one partner works 16 hours or more. These people would have experienced 100 per cent. deduction rate whilst on Income Support so their circumstances as a result of the change to Family Credit, will have improved.
3. Information for the years 1978–79, 1984–85, 1986–87 and 1987–88 is not available.
4. Figures based on Family Expenditure Survey data.
invested at minimum lending rates and the income assumed to be received by a benefit claimant with £5,000 capital for both housing benefit and poll tax benefit calculations.

§ Mr. Burt
The information requested is in the table. This reflects changes in the base rate rather than the 675W minimum lending rate—the two are often used as broad synonyms but the latter has only been used intermittently

Tapered amount set against benefit

Base rate Amount of interest earned on capital of £5,000 invested at base rate Benefit deduction for £5,000 capital in both housing benefit and community charge benefit Housing benefit (65 per cent, taper) Community charge benefit (15 per cent, taper)

Date Per cent. Per week £ Per week £ Per week £ Per week £

5 May 1992 10.00 9.615 8.00 5.20 1.20

16 September 1992 12.00 11.538 8.00 5.20 1.20

17 September 1992 10.00 9.615 8.00 5.20 1.20

22 September 1992 9.00 8.653 8.00 5.20 1.20

16 October 1992 8.00 7.692 8.00 5.20 1 20

13 November 1992 7.00 6.730 8.00 5.20 1.20

26 January 1993 6.00 5.769 8.00 5.20 1.20

Number of people with marginal deduction rates including social security (thousands)
Per cent.	1985–86	1988–89	1989–90	1990–91	1991–92	1992–93
100+	70	0	0	0	0	0
90+	130	45	45	45	55	75
80+	290	345	210	235	205	250
70+	290	515	415	395	400	500
60+	450	515	420	395	405	510
50+	680	515	420	395	405	510
40+	n.a.	n.a.	455	665	435	520

				Tapered amount set against benefit
	Base rate	Amount of interest earned on capital of £5,000 invested at base rate	Benefit deduction for £5,000 capital in both housing benefit and community charge benefit	Housing benefit (65 per cent, taper)	Community charge benefit (15 per cent, taper)
Date	Per cent.	Per week £	Per week £	Per week £	Per week £
5 May 1992	10.00	9.615	8.00	5.20	1.20
16 September 1992	12.00	11.538	8.00	5.20	1.20
17 September 1992	10.00	9.615	8.00	5.20	1.20
22 September 1992	9.00	8.653	8.00	5.20	1.20
16 October 1992	8.00	7.692	8.00	5.20	1 20
13 November 1992	7.00	6.730	8.00	5.20	1.20
26 January 1993	6.00	5.769	8.00	5.20	1.20