§ Mr. Ralph Howellasked the Secretary of State for Social Services what percentage increase in gross earnings a man with a wife and two children, earning £40 per week would require in order to increase his net weekly spending power by 14 per cent., which is the current rate of inflation, taking into account tax and national insurance and adjustments to rent and rate rebates, and assuming that he is due for reassessment for FIS within one month.
§ Mr. Orme,pursuant to his reply [Official Report, 26th October 1976; Vol. 918, c. 130–1], circulated the following information:
Net spending power is determined by tax and benefit levels as well as increases in earnings all of which change at different times. The only meaningful approach to this question is therefore to examine the family situation over a past period of 12 months, to reflect an annual rate of inflation, in which case a 14.2 per cent. increase in earnings would have resulted in a 14 per cent. increase in net weekly spending power.
NOTES:
1. Net weekly spending power is earnings plus family allowances plus family income supplement less tax less national insurance plus rent rebate plus rate rebate less rent less rates plus the value of free school meals and welfare milk less work expenses.
2. Housing costs and work expenses are assumed to have risen between November 1975 and November 1976. The assumptions are:
November 1975 November 1976 £ £ Rent … 4.33 4.72 Rates … 1.73 1.90 Work expenses … 0.75 1.75 3. FIS would not have been payable in November 1975.