§ Mr. WillettsTo ask the Chancellor of the Exchequer if he will list the taxes and benefits taken into account in calculating the effect of Government reforms on marginal deduction rates, as shown in Table 4.2 of the Red Book, HC 346. [122498]
§ Dawn Primarolo[holding answer 16 May 2000]: A marginal deduction rate (MDR) measures how much of an additional pound of earnings is deducted through the combination of taxes and/or reduced entitlement to benefits and/or tax credits. The figures in table 4.2 of the Red Book are for working households in receipt of income-related benefits or the Working Families Tax Credit where at least one person works 16 hours or more a week. The calculation of an MDR therefore incorporates Income Tax (taking into account personal allowances and tax credits such as the Children's Tax Credit) employee National Insurance Contributions, and income-related benefits and tax credits, namely the Working Families Tax Credit, Council Tax Benefit and Housing Benefit.