HC Deb 25 June 1998 vol 314 cc615-6W
Mr. Peter Bottomley

To ask the Chancellor of the Exchequer if he will estimate the impact, net of deductions and benefit changes, on household income of hourly rate increases of(a) 10 pence, (b) 20 pence, (c) 30 pence and (d) 40 pence for workers on average hours with (i) one and (ii) two dependent children in one-earner households. [47238]

Dawn Primarolo

The net gain from an increase in hourly wage will depend on a range of factors. These include the rate of income tax faced, which will in turn depend on the hourly wage before the increase; the rate at which National Insurance Contributions (NICs) are paid; and the benefits received, which will in turn depend on family income, the age of children in the family, and the level of the family's rent (if any) and council tax.

The Working Families Tax Credit and the NICs reforms announced in the Budget will substantially reduce the number of families facing very high marginal deduction rates—that is, families will keep more of any increase in their earnings.

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