HC Deb 01 February 1974 vol 868 cc181-6W
Mr. Ralph Howell

asked the Chancellor of the Exchequer (1) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £25, and that the previous year's pay was at the same rate, allowing for relevant tax repayments and any welfare benefits, and assuming rent or mortgage repayments of £5 per week, (a) when working normally and (b) when working short time and earning £15 on Monday, Tuesday and Wednesday and receiving unemployment benefit for the rest of the week and any other benefits/allowances to which he may be entitled;

(2) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £25 and that the previous year's pay was at the same rate, allowing for relevant tax repayments and welfare benefits and assuming rent or mortgage repayments of £5 per week (a) when working normally and (b) when working short time and earning £17.50 on Thursday, Friday and Saturday, and receiving unemployment benefit for the rest of the week and any other benefits/allowances to which he may be entitled;

(3) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £25, and that the previous year's pay was at the same rate, allowing for relevant tax repayments and any welfare benefits and assuming rent or mortgage repayments of £5 per week (a) when working normally and (b) when working a four-day week and earning £20;

(4) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £35, and that the previous year's pay was at the same rates, allowing for relevant tax repayments and any welfare benefits and assuming rent or mortgage repayments of £5 per week (a) when working normally and (b) when working short time and earning £21 on Monday, Tuesday and Wednesday and receiving unemployment benefit for the rest of the week and any other benefits/allowances to which he may be entitled;

(5) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £35, and that the previous year's pay was at the same rates, allowing for relevant tax repayments and any welfare benefit and assuming rent or mortgage repayments of £5 per week (a) when working normally and (b) when working short time and earning £24.50 on Thursday, Friday and Saturday, and receiving unemployment benefit for the rest of the week and any other benefits/allowances to which he may be entitled;

(6) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £35, and that the previous year's pay was at the same rates, allowing for relevant tax repayments and any welfare benefits and assuming rent or mortgage repayments of £5 per week (a) when working normally and (b) when working a four-day week and earning £28:

(7) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £30, and that the previous year's pay was at the same rates, allowing for relevant tax repayments and any welfare benefits and assuming rent or mortgage repayments of £5 per week (a) when working normally and (b) when working short time and earning £18 on Monday, Tuesday and Wednesday and receiving unemployment benefit for the rest of the week and any other benefits/allowances to which he may be entitled:

(8) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £30, and that the previous year's pay was at the same rate, allowing for relevant tax repayments and any welfare benefits and assuming rent or mortgage repayments of £5 per week (a) when working normally and (b) when working short time and earning £21 on Thursday, Friday and Saturday, and receiving unemployment benefit for the rest of the week and any other benefits/allowances to which he may be entitled;

(9) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £30, and that the previous year's pay was at the same rate, allowing for relevant tax repayments and any welfare benefits and assuming rent or mortgage repayments of £5 per week (a) when working normally, and (b) when working a four-day week and earning £24;

(10) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £40, and that the previous year's pay was at the same rates, allowing for relevant tax repayments and any welfare benefits and assuming rent or mortgage repayments of £5 per week (a) when working normally, and (b) when working short time and earning £24 on Monday, Tuesday and Wednesday, and receiving unemployment benefit for the rest of the week and any other benefits/allowances to which he may be entitled;

(11) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £40, and that the previous year's pay was at the same rate, allowing for relevant tax repayments and any welfare benefits and assuming rent or mortgage repayments of £5 per week (a) when working normally, and (b) when working short time and earning £28 on Thursday, Friday and Saturday, and receiving unemployment benefit for the rest of the week and any other benefits /allowances to which he may be entitled;

(12) if he will compare the total net weekly income of a man with a wife and two children, assuming a weekly wage of £40, and that the previous year's pay was at the same rates, allowing for relevant tax repayments and any welfare benefits and assuming rent or mortgage repayments of £5 per week (a) when working normally, and (b) when working a four-day week and earning £32.

Mr. Dean

I have been asked to reply.

For the purposes of calculating the information requested by my hon. Friend the assumptions which have been made are that rent is £5 a week; that rates are £1.60 a week; that there are no income tax allowances other than personal allowances for a married man with two children (who are assumed to be aged 8 and 4 years); and that the earnings are paid in week 41 of the present tax year, that is the week from 11th to 17th January 1974 inclusive. For the purposes of determining entitlement to benefits to which expenses associated with work are relevant such expenses have been assumed to be 60p a week. As regards unemployment benefit the assumptions made are that the man normally works a five-day week; that he has completed the waiting days for benefit; that he is not covered by a guaranteed wages agreement for any of the days on which he does not work, although, as my hon. Friend will be aware, such agreements apply to very substantial numbers of people, and that earnings-related supplement would not be payable.

While the assumption that Saturday working attracts time-and-a-half which my hon. Friend has made has been followed, he will know that this assumption is by no means necessarily valid for all workers; and, in any event, since double working on Wednesday has been allowed, the amount of Saturday work on the part of those who do not normally work on that day will clearly be reduced substantially. I must also make it clear that rent rebate during short-time working would require a special application by the tenant, and, in common with free school meals and welfare milk, would be for the duration of the short-time working only, except in those cases where there was entitlement during normal working.

On this basis, the following are the figures of "net weekly disposable income"—defined as earnings less tax deductions, contracted-in national insurance contributions and net housing cost, but plus family allowance, the value of free school meals and free welfare milk where appropriate, and any income tax refund. "Net housing cost" in turn means rent plus rates less rent rebate.

For the man earning £25, (i) when working normally, £20.48½ (ii) when working short-time on Monday, Tuesday and Wednesday and earning £15, £20.39½; (iii) when working short-time on Thursday, Friday and Saturday and earning £17.50, £22.36; and (iv) when working four days not including Saturday and earning £20, £18.48½. Assuming in each case the proportionate earnings given in my hon. Friend's Questions, the corresponding figures for the man normally earning £35 a week are (i) £24.23; (ii) £21.83; (iii) £25.69; and (iv) £20.87. For the man normally earning £30 a week the figures are (i) £21.83; (ii) £20.60; (iii) £23.99; and (iv) £20.08½. For the man normally earning £40 a week the figures are (i) £26.63; (ii) £23.27; (iii) £29.16; and (iv) £22.79.

Mr. Ralph Howell

asked the Chancellor of the Exchequer if he will tabulate all the benefits, including free school meals, free milk, &c., together with their value, which a man with a wife and two children can claim assuming a mortgage repayment liability of £7 a week, and previous earnings of £30 per week (and that the previous year's pay was at the same rate) when (a) unemployed, and (b) on a three-day week earning £18 and drawing unemployment for remaining days.

Mr. Dean

I have been asked to reply.

For the purposes of calculating the information requested by my hon. Friend, the assumptions which have been made are that the mortgage is for a term of 25 years, the rate of interest is 11 per cent. per annum and this is the first year of repayment; and that rates are £l.60 a week. It has been further assumed that there are no income tax allowances other than personal allowances for a married man with two children (who are assumed to be aged 8 and 4 years); and that the income tax week in question is week 41 of the present tax year, that is the week from 11th to 17th January 1974 inclusive. National insurance contributions under (b) of the Question are at the (contracted-in) rate of £1.31 a week; and, for the purposes of determining entitlement for benefits to which expenses associated with works are relevant, such expenses have been assumed to be 60p a week. As regards unemployment benefit it is assumed that the man normally works a five-day week; that he has completed the waiting days for benefit including earnings-related supplement, which is assumed to be £7; and that he is not covered by a guaranteed wages agreement for any of the days on which he does not work, although, as my hon. Friend will be aware, such agreements apply to very substantial numbers of people. The three working days assumed by my hon. Friend in (b) of his Question are assumed to be Monday, Tuesday and Wednesday.

Entitlement to means-tested benefits is determined in part by reference to the tax refunds payable under both (a) and (b) of my hon. Friend's assumptions; these, for the income tax week already referred to, which falls late in the tax year, are £8.10 under (a) and £2.70 under (b). There would be no entitlement to free school meals or free welfare milk in the circumstances my hon. Friend has assumed while the man concerned was in full-time work. For determining entitlement to supplementary benefit under (b), no resources other than those stipulated, and the tax refund less disregard, have been taken into account.

On this basis the figures under (a) of my hon. Friend's Question are family allowance £0.90; and unemployment benefit £22.60; and under (b) they are family allowance £0.90; unemployment benefit £5.20; supplementary benefit £0.35; free school meals £0.60; and free welfare milk £0.38½.