HC Deb 21 February 1980 vol 979 cc335-42W
Mr. Ralph Howell

asked the Chancellor of the Exchequer (1) what would be the costs of raising the tax threshold to (a) supplementary benefit levels, (b) supplementary benefit levels, including housing costs and (c) family income supplement levels;

(2) if he will publish a table for each years since 1971 showing tax thresholds for each of a one, two, three and four-child family as a percentage of the cutoff points on the income scale at which entitlement to family income supplement is extinguished, and as a percentage of average male manual earnings;

(3) if he will publish a table for each year since 1971 comparing the tax-free income for each of a one, two, three and four-child family, including children aged between 11 years and 16 years and over 16 years, with family income supplement and supplementary benefit entitlement levels, including average housing costs;

(4) if he will publish a table for each year since 1949–50 showing the tax-free income for each of a single person, a single-wage married couple, a two-wage married couple and single-wage couples with each of one, two, three and four children, as a percentage of average male earnings in October each year.

Mr. Peter Rees

The figures for tax thresholds and tax free incomes from 1971–72 are as shown in table 1–5 below.

In estimating the cost of increasing thresholds, no adjustment has been made to the level of thresholds which are already above the relevant supplementary benefit level.

The estimates are based on the simplifying assumption that the families of the following sizes are formed of children of specific ages; corresponding to the age bands for the old child tax allowances. Within an age band the corresponding supplementary benefits or FIS levels have been averaged.

Number of children in family and ages of children

1 child, under 11

2 children, under 11

3 children, 2 under 11, 1 at 11–15 years

4 children, 2 under 11, 1 at 11–15 years, 1 at 16 years or over.

The family income supplement levels used are those income levels below which the supplement becomes payable.

TABLE 1
TAX THRESHOLD AND TAX FREE INCOME AS A PERCENTAGE OF AVERAGE MANUAL EARNINGS
Single percentage Married percentage Married, two wage earners* percentage
1971–72 … … 26.0 37.2 41.6
1972–73 … … 31.7 41.4 48.2
1973–74 … … 28.3 36.9 42.7
1974–75 … … 24.4 33.8 37.3
1975–76 … … 21.1 29.9 32.0
1976–77 … … 20.6 30.4 31.7
1977–78 … … 24.4 37.6 38.5
1978–79 … … 22.0 34.2 35.1
1979–80 … … 22.1 34.5 35.5
* As a percentage of the sum of average earnings for a man and a woman manual worker.

TABLE 2
MARRIED COUPLE WITH ONE CHILD UNDER 11 YEARS
Tax threshold Tax free income
Tax threshold Tax free income As a percentage of average earnings of a manual worker As a percentage of family income supplement As a percentage of supplementary benefit plus average housing costs As a percentage of average earnings of a manual worker As a percentage of family income supplement As a percentage of supplementary benefit plus average housing costs
1971–72 … … 797 797 49.6 85.2 103.0 49.6 85.2 103.0
1972–73 … … 971 971 52.1 93.3 112.3 52.1 93.3 112.3
1973–74 … … 975 975 46.4 87.2 100.4 46.4 87.2 100.4
1974–75 … … 1,105 1,105 43.2 85.0 98.2 43.2 85.0 98.2
1975–76 … … 1,195 1,195 37.4 73.0 84.5 37.4 73.0 84.5
1976–77 … … 1,385 1,385 38.8 68.3 85.2 38.8 68.3 85.3
1977–78 … … 1,651 1,703 42.1 72.5 91.1 42.7 74.8 93.9
1978–79 … … 1,635 1,769 35.4 68.3 86.0 36.5 74.0 93.1
1979–80 … … 1,815 2,023 33.1 62.3 83.5 34.5 69.5 93.1

TABLE 3
MARRIED COUPLE WITH TWO CHILDREN UNDER 11 YEARS
Tax threshold Tax free income
Tax threshold Tax free income As a percentage of average earnings of a manual worker As a percentage of family income supplement As a percentage of supplementary benefit plus average housing costs As a percentage of average earnings of a manual worker As a percentage of family income supplement As a percentage of supplementary benefit plus average housing costs
1971–72 … … 895 942 54.1 86.0 104.7 62.0 90.5 110.2
1972–73 … … 1,069 1,116 56.0 93.5 110.1 62.8 97.5 114.9
1973–74 … … 1,068 1,115 49.7 83.8 97.9 55.9 87.5 102.1
1974–75 … … 1,246 1,293 47.8 85.6 98.3 52.6 88.8 102.1
1975–76 … … 1,305 1,383 39.9 71.7 82.3 44.9 76.0 87.2
1976–77 … … 1,555 1,633 42.7 68.7 85.1 47.2 72.2 89.4
1977–78 … … 1,821 1,951 45.5 73.3 87.6 47.1 78.4 93.9
1978–79 … … 1,735 2,002 36.5 66.7 81.0 38.7 77.0 93.4
1979–80 … … 1,815 2,231 31.9 57.7 75.9 34.5 70.9 93.4

TABLE 4
MARRIED COUPLE WITH THREE CHILDREN, TWO CHILDREN UNDER 11 YEARS, ONE AGED 11–16 YEARS
Tax threshold Tax free income
Tax threshold Tax free income As a percentage of average earnings of a manual worker As a percentage of family income supplement As a percentage of supplementary benefit plus average housing costs As a percentage of average earnings of a manual worker As a percentage of family income supplement As a percentage of supplementary benefit plus average housing costs
1971–72 … … 1,021 1,120 59.9 89.2 105.0 76.4 97.9 115.2
1972–73 … … 1,194 1,293 60.9 95.7 109.2 75.2 103.6 118.6
1973–74 … … 1,191 1,290 54.1 86.4 97.1 67.1 93.6 105.2
1974–75 … … 1,417 1,516 53.3 87.9 99.0 63.3 94.0 105.9
1975–76 … … 1,450 1,606 43.3 72.4 81.1 53.6 80.2 89.9
1976–77 … … 1,760 1,916 47.3 70.5 85.2 56.6 76.8 92.7
1977–78 … … 2,026 2,234 49.7 75.2 85.0 52.4 82.9 93.8
1978–79 … … 1,870 2,271 38.3 66.6 77.0 41.7 80.9 93.5
1979–80 … … 1,815 2,439 30.8 53.7 68.2 34.5 72.2 91.7

TABLE 5
MARRIED COUPLE WITH FOUR CHILDREN, TWO CHILDREN UNDER 11 YEARS, ONE AGED 11–16 YEARS, AND ONE OVER THE AGE 16 YEARS
Tax threshold Tax free income
Tax threshold Tax free income As a percentage of average earnings of a manual worker As a percentage of family income supplement As a percentage of supplementary benefit plus average housing costs As a percentage of average earnings of a manual worker As a percentage of family income supplement As a percentage of supplementary benefit plus average housing costs
1971–72 … … 1,179 1,329 67.1 94.5 99.8 92.8 106.5 112.5
1972–73 … … 1,352 1,503 67.2 100.0 102.1 89.4 111.2 113.5
1973–74 … … 1,344 1,495 59.7 89.1 91.9 79.7 99.1 102.2
1974–74 … … 1,618 1,769 59.7 91.5 93.6 75.3 100.1 102.3
1975–76 … … 1,625 1,859 47.4 74.4 75.9 63.1 85.1 86.8
1976–77 … … 1,995 2,229 52.5 73.1 80.4 66.9 81.7 89.8
1977–78 … … 2,261 2,461 54.4 77.9 78.4 58.4 84.8 85.3
1978–79 … … 2,036 2,569 40.6 67.5 69.4 45.4 85.2 87.5
1979–80 … … 1,815 2,647 29.8 50.2 56.9 34.5 73.2 83.0
The tax threshold is defined here as the amount that can be earned before liability to tax arises. For years up to 1976–77 it is the single or married tax allowance plus—where appropriate—child tax allowance less family allowance deduction—clawback—less amount of family allowance. For the years 1977–78 onwards it is the amount of the tax allowances.
Tax free income is the amount of income that can be received before liability to tax arises for years up to 1976–77 it is the single or married tax allowance plus—where appropriate—child tax allowance less family allowance deduction (clawback). For the years 1977–78 onwards it is the amount of the tax allowances, plus child benefit for families with children.
It is regretted that figures for years back to 1949–50 could only be provided at disproportionate cost but the answer I gave on 27 July 1979—[Vol. 971 c.556–58]—gives most of the details for those years.
The costs in a full year at 1979–80 income levels of increasing tax free income—including child benefit—to the specified levels by raising personal allowances and reintroducing child tax allowances are about:
(a) £100 million, to supplementary benefit levels.
(b) £1,350 million, to supplementary benefit levels, including average housing costs.
(c) £1,775 million, to family income supplement levels.
The cost of increasing tax allowances to the specified levels by raising personal allowances and reintroducing child tax allowances are about:
(a) £630 million
(b) £2,100 million
(c) £2,500 million