Taxation (Hansard, 25 May 1978)

§ Mr. Ralph Howell
asked the Chancellor of the Exchequer if he will publish a table for each year since 1949–50, showing for each of a single person, a married couple, and married couples with each of one, two, three and four dependent children, and assuming 50 per cent., 75 per cent., 100 per cent., and 150 per cent. of average male manual earnings in each case, income tax plus national insurance contribution—contracted into the State pension scheme—as a percentage of gross earnings including family allowance/child benefit where appropriate.

Year Earnings Effective rate of tax plus social security contributions Per cent.

1973–74 … … … … … Average earnings … … … 21.6

Twice average earnings … … 26.1

Three times average earnings … 28.7

1978–79 (Tax rates and scales as proposed in April 1978 Budget). Average earnings … … … 25.0

Twice average earnings … … 30.8

Three times average earnings … 37.6

1978–79 (Tax rates and scales as amended in Committee). Average earnings … … … 24.6

Twice average earnings … … 29.7

Three times average earnings … 35.3

Notes:

1. The figures have been calculated on the same basis as those given in reply to the hon. Member on 17th April 1978.

2. For 1978–79 average earnings have been notionally estimated as follows. On the basis that in October 1977 a man on average earnings had not yet received an increase in the current pay round, it may be assumed that his earnings will rise by a further 10 per cent. to October 1978 in accordance with the Government's guideline. It is assumed that the retail prices index will rise by 7 per cent. over the same period. The rates of tax and national insurance contributions are those proposed for 1978–79.

3. It has been assumed that the employee is not contracted out of the graduated pension scheme in 1973–74 and 1978–79.

§ Mr. Ian Stewart
asked the Chancellor of the Exchequer if he will publish a table on the same basis as his reply to the hon. Member for Norfolk, North (Mr. Howell), Official Report, 2nd December 1977, column 462, showing the effective
736W

§ Mr. Robert Sheldon
I would refer the hon. Member to the reply given to the hon. Member for Leek (Mr. Knox) on 24th November 1977—[Vol. 939, col. 847–8]—which contained some of the information requested.
I regret that the remaining information could only be provided at an excessive cost.

Year	Earnings	Effective rate of tax plus social security contributions Per cent.
1973–74	…	…	…	…	…	Average earnings	…	…	…	21.6
						Twice average earnings	…	…	26.1
						Three times average earnings	…	28.7
1978–79 (Tax rates and scales as proposed in April 1978 Budget).	Average earnings	…	…	…	25.0
						Twice average earnings	…	…	30.8
						Three times average earnings	…	37.6
1978–79 (Tax rates and scales as amended in Committee).	Average earnings	…	…	…	24.6
						Twice average earnings	…	…	29.7
						Three times average earnings	…	35.3
Notes:
1. The figures have been calculated on the same basis as those given in reply to the hon. Member on 17th April 1978.
2. For 1978–79 average earnings have been notionally estimated as follows. On the basis that in October 1977 a man on average earnings had not yet received an increase in the current pay round, it may be assumed that his earnings will rise by a further 10 per cent. to October 1978 in accordance with the Government's guideline. It is assumed that the retail prices index will rise by 7 per cent. over the same period. The rates of tax and national insurance contributions are those proposed for 1978–79.
3. It has been assumed that the employee is not contracted out of the graduated pension scheme in 1973–74 and 1978–79.