HC Deb 10 July 1986 vol 101 c247W
Mr. Hickmet

asked the Chancellor of the Exchequer how much a married man with a non-working wife and (a) two children and (b) three children needs to gross before being better off than the same man who is unemployed and in receipt of all benefits available; what effect a reduction of the basic rate of tax to 25p would have; and if he will make a statement.

Mr. Norman Lamont

[pursuant his reply, 9 June 1986, c. 76]: A married man with two children aged four and six, paying rent of £16.50 and rates of £6.30 each week, would need to earn at least £38.26 a week to be better off in work than unemployed after taking into account social security benefits at November 1985 levels. A married man with three children aged three, eight and 11 with the same housing costs would need to earn £43.63 a week.

In both cases, if these pay rates were maintained for the whole tax year and the couples had no other sources of taxable income, there would be no tax payable. Reducing the basic rate would thus have no effect on these families.