HC Deb 10 April 1984 vol 58 cc148-9W
Mr. Wrigglesworth

asked the Chancellor of the Exchequer if he will estimate the level of income in current prices and expressed as a percentage of national average earnings above which single people, married couples and married couples with two children in each case in 1983–84 and 1984–85 pay less income tax and national insurance contributions and less child benefit where applicable" as a total sum of money in constant prices and as a proportion of gross earnings than they did in 1978–79, using for 1984–85 the assumptions contained in the Red Book forecast; and if he will express his answer in the manner of the answer on 28 March 1982, at column 68.

Mr. Moore

[pursuant to his reply, 3 April 1984, c. 450]: The multiples of average earnings are shown in the following table. The rows of the table refer to the cases where tax plus national insurance contributions (NIC) less child benefit (where appropriate) is expressed (a) as a proportion of gross earnings; and (b) at constant (1978–79) prices.

Single Married Married with two children under 11 years
(a) 1983–84 2.1 2.2 2.3
1984–85 2.0 1.9 1.7
(b) 1983–84 3.3 3.4 3.4
1984–85 3.5 3.5 3.6

The calculations assume that the taxpayer has no allowances or reliefs other than the appropriate personal allowances. National insurance contributions are at the contracted-in rate. In the case of married couples it has been assumed that the husband is the sole earner. Average earnings for full-time adult males (all occupations) have been taken at £171.30 per week in 1983–84 and £182.40 per week in 1984–85. For purposes of illustration, an increase in child benefit of 5½ per cent. in November 1984 has been assumed, in line with the assumptions used in the public expenditure White Paper (Cmnd. 9143). The actual increase will be announced in June.

The increases in income tax and NIC below the earnings levels shown do not mean that those concerned are worse off than in 1978–79. Gross earnings have risen by more than prices and the real net earnings—after income tax, NIC and child benefit — of those in employment whose earnings have increased in line with the national average are higher than in 1978–79.