§ Mr. Onslowasked the Chancellor of the Exchequer what was the percentage of weekly earnings paid by the average wage earner, with a wife and two children aged 10 years or under, in income tax 428W and national insurance contributions, in June 1978, and in the same month in each of the previous 14 years.
§ Mr. Robert SheldonThe latest available estimate of average earnings is that for April 1978. On the assumption that the man earned the average manual wage in April of each of the last fifteen years the figures are as follows:
PERCENTAGE OF EARNINGS PAID IN INCOME TAX AND NATIONAL INSURANCE CONTRIBUTIONS per cent. April 1964 9.6 April 1965 11.0 April 1966 11.9 April 1967 12.3 April 1968 16.0 April 1969 17.6 April 1970 19.7 April 1971 18.2 April 1972 17.2 April 1973 19.8 April 1974 20.8 April 1975 24.7 April 1976 24.7 April 1977 23.1 April 1978 24.7 For years up to and including 1969 average manual earnings are the Department of Employment's estimates of the average weekly earnings in April of each year of full-time adult male manual workers. For the years from 1970 to 1977 the figures are based on the New Earnings Survey estimates of the average weekly earnings of similar workers, and for 1978 the April 1977 New Earnings Survey figure has been updated to April 1978 by the monthly index of average earnings.
"Earnings" does not include family allowance or child benefit. The percentages therefore reflect the increase in tax resulting from the phasing out of child tax allowances, but note the increase in income through the phasing in of child benefit.
For years before 1975, and for 1978, it has been assumed that the employee was not contracted out of the graduated pension scheme.
Tax has been calculated at the rates and allowances for the fiscal year starting in April, on earnings of 52 times the weekly figure in April.
The tax rates and allowances used for April 1978 are those contained in the Finance Bill, as finally approved by the House.
429WThe fact that the percentage for April 1977 was lower than for April 1978 is largely due to the increase in allowances made in the autumn of 1977—and backdated to April 1977—which anticipates the indexation required for 1978–79.