HC Deb 12 May 1976 vol 911 cc183-7W
Mr. Sillars

asked the Chancellor of the Exchequer what action he proposes, or what measures he has in hand, to ensure that resources taken from consumption by wages policy are not used for speculation in commodities or other similar activities.

Mr. Joel Barnett

The main purpose of the pay policy is to continue the successful attack on inflation, and the price controls help to ensure that the benefits of pay restraint are carried through to prices. In reviewing the price and profit controls the Government will also be concerned to promote investment and jobs. As regards the supervision of the commodity markets, I have nothing to add to the reply given by my hon. Friend the Minister of State, Department of Industry, to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) on 13th April.

Mr. Newton

asked the Chancellor of the Exchequer, if he will publish in the Official Report a revised version of the Explanatory Tables circulated in connection with h is Budget Statement, based on the pay restrictions now proposed following his discussions with the TUC.

Mr. Healey,

pursuant to the reply [Official Report, 10th May 1976; Vol. 911, c. 58], gave the following information:

The tables showing the effect of the income tax reliefs at different income levels and for different family circumstances remain valid since, for the reasons given in my statement of 5th May, I shall ask Parliament to approve in full the conditional reliefs described in my Budget speech. Figures showing the combined effect on net income at different initial earnings levels of the new pay limits which the General Council of the TUC is recommending and the tax reliefs are set out in the following tables, which show separately the position of a single person, a married couple— wife not working—and a married couple—wife not working with two children under 11. Since the tax reliefs were presented in the Explanatory Tables in terms of their gross pay equivalent, this is also shown.

Those tables further indicated that the reduction in prices resulting from a low pay limit would be about 2 per cent. at the end of 1977. Since the pay limit recommended by the General Council is much more tightly drawn than I assumed in my Budget Statement, we can still hope to achieve this price advantage. The value of the price saving varies with income level and family circumstances. For a man on average earnings with a non-working wife the price saving by end 1977 is expected to be worth about £2 a week in gross pay terms.

Table follows overleaf.

PAY POLICY AND TAX RELIEFS: INCREASE IN NET INCOME
Married couple (Wife not working)
Gross earnings Increase in gross earnings Increase in gross earnings after tax* Tax relief Gross pay value of Tax relief Increase in net income
£pw £pw £pw £pw £pw £pw per cent.
30 … … … 2.50 1.48 0.88 1.48 2.36 9.7
40 … … … 2.50 1.48 0.88 1.48 2.36 7.8
50 … … … 2.50 1.48 0.88 1.48 2.36 6.5
60 … … … 3.00 1.78 0.88 1.48 2.66 6.3
70 … … … 3.50 2.07 0.88 1.48 2.95 6.2
80 … … … 4.00 2.37 0.88 1.48 3.25 6.0
90 … … … 4.00 2.37 0.88 1.44 3.25 5.4
100 … … … 4.00 2.60 0.88 1.38 3.48 5.3
125 … … … 4.00 2.20 2.09 3.82 4.29 5.3
150 … … … 4.00 1.95 2.74 6.11 4.69 5.0
200 … … … 4.00 1.60 3.91 10.23 5.51 4.8
* Before Budget increases in personal tax allowances and allowing for graduated national insurance contributions.
Based on personal tax allowances but excludes income-related benefits such as family income supplement and housing rebates.

Single Person
Gross earnings Increase in gross earnings Increase in gross earnings after tax* Tax relief Gross pay value of Tax relief Increase in net income
£pw £pw £pw £pw £pw £pw per cent.
30 … … … 2.50 1.48 0.40 0.68 1.88 8.4
40 … … … 2.50 1.48 0.40 0.68 1.88 8.4
50 … … … 2.50 1.48 0.40 0.68 1.88 5.5
60 … … … 3.00 1.78 0.40 0.68 2.18 5.5
70 … … … 3.50 2.07 0.40 0.68 2.47 5.4
80 … … … 4.00 2.37 0.40 0.68 2.77 5.3
90 … … … 4.00 2.37 0.40 0.68 2.77 4.8
100 … … … 4.00 2.40 0.63 1.05 3.03 4.7
125 … … … 4.00 2.17 1.52 3.00 3.69 4.7
150 … … … 4.00 1.80 2.34 5.20 4.14 4.6
200 … … … 4.00 1.60 3.09 8.66 4.69 4.2
* Before Budget increases in personal tax allowances and allowing for graduated national insurance contributions.
Based on personal tax allowances but excludes income-related benefits such as family income supplement and housing rebates.

Married couple with two children under 11 (wife not working)
Gross earnings Increase in gross earnings Increase in gross earnings after tax* Tax relief† Gross pay value of Tax relief Increase in net income
£pw £pw £pw £pw £pw £pw per cent.
30 … … … 2.50 1.48 1.68 2.84 3.16 11.3
40 … … … 2.50 1.48 1.68 2.84 3.16 9.3
50 … … … 2.50 1.48 1.68 2.84 3.16 7.9
60 … … … 3.00 1.78 1.68 2.84 3.46 7.5
70 … … … 3.50 2.07 1.68 2.84 3.75 7.2
80 … … … 4.00 2.37 1.68 2.84 4.05 7.0
90 … … … 4.00 2.37 1.68 2.68 4.05 6.4
100 … … … 4.00 2.60 1.68 2.58 4.28 6.1
125 … … … 4.00 2.20 2.80 5.09 5.00 5.9
150 … … … 4.00 2.00 3.79 7.80 5.79 5.9
200 … … … 4.00 1.60 5.29 13.24 6.89 5.7
*Before Budget increases in personal tax allowances and allowing for graduated national insurance contributions.
† Including increases in child tax allowances.
Based on personal tax allowances but excludes income-related benefits such as family income supplement and housing rebates. Family allowance is assumed to be claimed at all income levels clawback has been deducted.