§ Mr. Ralph Howellasked the Secretary of State for Social Services (1) what is the increase in net spending power on the same basis as figures published in reply to the hon. Member for Norfolk, North, Official Report, 22nd November 1977, column 683, of a man with a wife and two children when his wage is increased from £75 per week by (a) 10 per cent., and (b) 15 per cent.; and if he will compare this with the net weekly spending power of a similar family when unemployed (a) when in receipt of tax 33W refunds, and (b) when all tax refunds have been repaid.
(2) if he will show the increases in net weekly spending power for a married man with two children of school age, whose housing costs are £7.80 a week, when his wage of £75 is increased by (a) 10 per cent., and (b) 15 per cent.; and if he will compare these figures with the increase in spending power of an unemployed person with similar family commitments and with previous earnings of £75 (i) with tax refunds, and (ii) without tax refunds, following the recent 14 per cent., uprating of unemployment benefit.
§ Mr. Orme,pursuant to his replies [Official Report, 7th December 1977; Vol. 940, c. 741–2; 13th December 1977; Vol.
TABLE 1 EMPLOYED Date Gross earnings £ Income tax £ National insurance contributions £ Net weekly spending power £ Increase over March 1977 £ March 1977 … … … 75.00 15.78 4.31 48.04 — March 1978— (a) … … … 82.50 16.14 4.74 54.92 6.88 (14%) (b) … … … 86.25 17.42 4.96 56.57 8.53 (18%) There would be no entitlement to any means-tested benefits. 34W
TABLE 2 UNEMPLOYED Date Earnings prior to umemployment £ Unemployment benefit and earnings related supplement £ Rent rebate £ Rate rebate £ Free school meals £ Net weekly spending power £ Increase over March 1977 £ March 1977 … … 75.00 37.77 3.88 1.47 — 38.00 — March 1978— (a) … … 82.50 42.48 4.23 1.60 1.25 44.26 6.26 (b) … … 86.25 (16%) Notes: 1. Assumptions: children aged 3 and 5 in 1977; family allowance £1.50 (1977) child benefit £2.50 (1978); rent £4.72 (1977) £5.60 (1978); rates £1.90 (1977) £2.20 (1978); work expenses £1.75 (1977) £2 (1978). It has been assumed that the man, when unemployed, was entitled to flat-rate unemployment benefit and earnings-related supplement in each spell of unemployment. Other assumptions made in compiling the tables in my reply to the hon. Member on 22nd November also apply.—[Vol. 939, c. 683–90.] 2. Income tax refunds have not been included as part of the net weekly spending power of the unemployed man. As has been previously explained to the hon. Member, it is not realistic to regard tax refunds as part of the regular weekly income of an unemployed person, only on the point of time in a tax year but also on the number of weeks of employment usually occur at monthly intervals. Moreover, the payment of tax refunds will depend not only on th point of time in a tax year but also on the number of weeks of employment during the tax year. The approximate weekly amounts of such refunds, however, would be £10.50 in March 1977 and £11.95 in March 1978. Receipt of tax refunds would affect the family's entitlement to free school meals. 941, c. 148–9], gave the following information:
As in earlier replies to similar Questions by the hon. Member, comparisons of net weekly spending power involving yearly wage increases and tax and benefit levels have been made over a past period of a year. The figures given in the tables below therefore compare the net weekly spending power of a man with earnings of £75 in March 1977 with his position a year later when his earnings had been increased (a) by 10 per cent. and (b) by 15 per cent. Because of the many assumptions which have had to be made, the figures relate only to the particular illustrative cases requested, have no general application and cannot be quoted out of context.