§ Mr. Richard Wainwrightasked the Secretary of State for Social Services if he will list in the Official Report the number of (a) two-parent families and (b) single parent families who were in full time work and earning less than the supplementary benefit level for each year since 1972.
§ Mr. OrmeThe table below gives the numbers of two-parent families and one-parent families where the head was a full-time employee or was self-employed and where the family income was below supplementary benefit level at the end of each year from 1972 to 1975:
GREAT BRITAIN No. of two-parent families 1972 … … … … [40,000] 1973 … … … … [40,000] 1974 … … … … 60,000 1975 … … … … 100,000 No. of one-parent families 1972 … … … … [10,000] 1973 … … … … [10,000] 1974 … … … … [10,000] 1975 … … … … [10,000] 1. All figures are rounded to the nearest 10,000.
2. The estimates are based on a Department of Health and Social Security analysis of incomes and other information recorded by respondents to the Family Expenditure Survey (FES) for 1972, 1973, 1974 and 1975. The estimates are subject to sampling error—particularly those in square brackets.
3. Both full-time employees and those who are self-employed are included. However, due to a difference in the analysis of incomes of the self-employed, figures for 1974 and 1975 are not directly comparable with those for 1972 and 1973. In earlier years it was assumed that the income distribution of the self-employed was the same as for employees. Self-employed sample records were included in the analysis in 1974 for the first time, and this has been repeated in 1975, the effect being to increase the numbers of families with incomes below supplementary benefit level. The figures on the self-employed are especially liable to error because their incomes recorded in the Family Expenditure Survey tend to be particularly low in relation to their recorded expenditure. This discrepancy is partly due to the incomes of the self-employed being recorded in many cases for a much earlier 351W period than that to which their expenditure relates, and the data for 1975 have been adjusted to take account of this.
4. The estimates relate only to the population living in private households, since families and persons in institutions are not included in the FES sample.
5. The supplementary benefit level is taken as being the supplementary benefit scale rate appropriate to the family. Income refers to net income less net housing costs and work expenses where appropriate.
6. The comparison is based on the family's normal income in the normal employment situation of the family head. For example, where the head of the family had been off work due to sickness or unemployment for less than three months at the time of the survey, the family's normal income when the head was at work was used in determining the level of income.
7. The increase in the estimated number of families with income below the supplementary benefit level between 1974 and 1975 is attributable partly to the fact that the relationship of supplementary benefit rates to net earnings deteriorated during 1974 but was largely restored by the end of 1975 as result of the two upratings in that year, whereas there had been only one uprating in 1974, and that in July. As a consequence end of year comparisons of net income against supplementary benefit levels are at relatively different levels in the two years, the 1974 scale rates having eroded over five months while those for 1975 had eroded only over one month.
Marginal tax rate: Family type 100 per cent.or more 75-99per cent 50-74per cent Under 50per cent. 1974— Families with children … (20,000) (30,000) 250,000 5,640,000 Families without children … — (10,000) 120,000 9,390,000 All families … (20,000) (40,000) 370,000 15,030,000 1975— Families with children … 50,000 (40,000) 200,000 4,950,000 Families without children … — — 90,000 8,640,000 All families … 50,000 (40,000) 290,000 13,590,000 Notes: 1. All figures are rounded to the nearest 10,000. 2. The estimates are derived from a Department of Health and Social Security analysis of the incomes and other information recorded by respondents to the Family Expenditure Survey; all estimates are subject to sampling error; the figures in parentheses in particular are subject to considerable sampling error. 3. Higher rate taxpayers have been excluded from the tables. 4. Marginal tax rate may be defined as the percentage of a £1 increase in income which is lost through any combination of deductions for tax, national insurance contributions, family income supplement, housing rebates, etc., ensuing from the increase.
§ Mr. Richard Wainwrightasked the Secretary of State for Social Services if he will list in the Official Report the number of poor families who have a marginal tax rate in excess of 50 per cent. for each year since 1970; and if he will break this number down according to the
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§ Mr. Richard Wainwrightasked the Secretary of State for Social Services if he will list in the Official Report the number of low-income families who are subject to a marginal tax rate of (a) 100 per cent., (b) 75–-99 per cent., (c) 50–74 per cent. and (d) under 50 per cent. on each £1 increase in earnings; and if he will list this information for each year since 1970.
§ Mr. OrmeThe tables below show the numbers of families in Great Britain at the end of 1974 and 1975, where the family head was under pension age and was in full-time work, or was self-employed, and the family income would theoretically be liable to the various rates of marginal taxation on a £1 rise in earnings which the hon. Member has quoted. In practice, the numbers liable to suffer high marginal tax rates would be much smaller, since the estimates assume that all benefits are reassessed immediately on receipt of a pay rise; this would not happen in practice, since benefits such as family income supplement are awarded for 52 weeks, irrespective of subsequent changes of circumstances. I regret that reliable information in the same form is not available for earlier years.
gross weekly earnings of the families concerned.
§ Mr. OrmeThe estimates in the tables below show the numbers of families in Great Britain at the end of 1974 and 1975, where the family head was under 353W pension age and was a full-time employee or was self-employed, and where the family income was theoretically liable to a marginal tax rate in excess of 50 per cent. following a £1 rise in earnings. The estimates assume that all benefits would be reassessed immediately, but this would
FAMILIES THEORETICALLY LIABLE TO MARGINAL TAX RATE OF OVER 50 PER CENT. Gross earnings of family head Families with children Families without children All families 1974— Less than £20 … … … (20,000) (30,000) 50,000 £20–29.99 … … … 70,000 50,000 120,000 £30–39.99 … … … 140,000 (30,000) 170,000 £40–49.99 … … … 70,000 (10,000) 80,000 £50 and over … … … — (10,000) (10,000) All … … … 300,000 130,000 430,000 1975— Less than £30 … … … (30,000) (30,000) 60,000 £30–39.99 … … … 80,000 50,000 130,000 £40–49.99 … … … 120,000 (10,000) 130,000 £50–59.99 … … … 40,000 (10,000) 50,000 £60 and over … … … (10,000) — (10,000) All … … … 290,000 90,000 380,000 Notes: 1. All figures are rounded to the nearest 10,000; the sums of component parts may not equal the totals. 2. The estimates are derived from a Department of Health and Social Security analysis of the incomes and other information recorded by respondents to the Family Expenditure Survey. All the estimates are subject to sampling error; the figures in parentheses in particular are subject to considerable sampling error. 3. Higher rate taxpayers have been excluded from the table.
§ Miss Richardsonasked the Secretary of State for Social Services how many of the 300,000 families subject to the poverty trap to the extent that extra pay of El may lead to a loss of over 50 per cent. of it are (a) one-parent families and (b) two-parent families.
§ Mr. OrmeIt is estimated that at the end of 1975 there were in Great Britain about 280,000 families with children, where the family head was a full-time employee or was self-employed, and where family income was theoretically subject to a marginal tax rate in excess of 50 per cent. following a £1 rise in earnings. About 60,000 of these were one-parent families and 220,000 two-parent families.
The estimates assume that all benefits are adjusted immediately on receipt of a pay rise, but this would not happen in practice, since benefits such as family income supplement, free school meals and free milk and vitamins are awarded for 52 weeks, regardless of any subsequent changes of circumstances. The numbers actually facing marginal tax 354W not happen in practice because benefits such as family income supplement are awarded for 52 weeks, irrespective of subsequent changes of circumstances. In practice therefore, the numbers would be much smaller. I regret that similar information is not available for earlier years.
rates in excess of 50 per cent. would therefore be much smaller in practice than those given above.
The estimates, which are based on a Department of Health and Social Security analysis of Family Expenditure Survey data for 1975, are rounded to the nearest 10,000 and subject to sampling error.