§ Mr. Nicholas BennettTo ask the Chancellor of the Exchequer what is his estimate of the weekly income tax payment for(a) a single man on average earnings and (b) a married man with two children aged five and eight years on average earnings and with no other sources of income, at 1988 prices, on the basis of those income tax rates prevailing in 1978 with personal allowances uprated in line with rises in the retail price index; and what are the figures in each case following the implementation of the tax proposals contained in the 1988 Budget.
§ Mr. Norman LamontThe table shows the weekly income tax payments of a single man and a married man on average earnings under the tax regime proposed in the 1988 Budget and under the 1978–79 regime indexed. to 1988–89 levels according to the statutory formula. Since child tax allowances were being phased out in 1978–79 they have been excluded from the calculation of the indexed regime. Children do not affect a taxpayer's tax liability in 1988–89, but a married man with two children would. be entitled to £14.50 per week in child benefit.
Average earnings are those for full-time males paid at adult rates whose pay is unaffected by absence and are estimated at £244.70 per week in 1988–89.
Weekly income tax liability at average earnings (£) Indexed Single Married man 1978–79 64.66 57.11 1988–89 48.65 41.49 Difference 16.01 15.62
§ Mr. Nigel GriffithsTo ask the Chancellor of the Exchequer if, in the manner of his reply of 1 May 1987,Official Report, columns 291–93, he will update. to take account of the 1988 Budget, the information on tax and national insurance for different income ranges and household types.
§ Mr. Norman Lamont[holding answer 5 May, 1988]: The first table gives the ranges of earnings where income tax and national insurance contributions form a smaller proportion of gross earnings in 1988–89 than in 1978–79 for various family types. The second table gives the number of single people and married couples whose main source of income is earnings and whose total income is in the ranges specified in the previous table.
421W
Range of earnings1 Family type Up to Other ranges Over Husband only working—no children £ per week 40 47–69 165 Percentage of average earnings5 16 19–28 68 —Two children £ per week 40 47–80 209 Percentage of average earnings5 16 19–33 86 —Four children £ per week 40 47–84 283 Percentage of average earnings5 16 19–34 116 1 In each of the ranges of percentages of average earnings shown, tax plus national insurance contribution is a smaller proportion of earnings in 1988–89 than in 1978–79. The income levels in £ per week are at 1988–89 levels, rounded to the nearest £1. It is assumed that the taxpayer has no investment income and no relief or allowance other than the appropriate personal allowance. 2 Less child benefit, where appropriate. 3 At contracted-in rates. 4 On the assumption that husband and wife each have the same multiple of the appropriate all occupations figure for average earnings (full-time males and females respective). 5 Average earnings of full-time males (all occupations) are £92.80 in 1978–79 and £244.70 in 1988–89, for females £59.60 and £161.80 respectively. 6 Percentage of joint income.
Single people and married couples liable to income tax whose main sources of income is earnings from employment Family type 1988–89 Range of income1 £ per week Numbers '000 Single Up to 40 0 41–46 0 47–69 610 70–93 920 94–104 460 105–128 1,080 Over 128 4,480 Married Both working Up to 68 0 69–76 0 77–103 10 104–119 220 120–174 2,050 175–318 870 Over 318 2,900 One working Up to 40 0 41–46 0 47–69 0 70–165 620 Over 165 2,930 1 The income levels are those for single people and childless married couples at which, if income were all earned, tax and NIC would be the same proportion of earnings in 1978–79 and 1988–89 (see previous table). Reliable estimates which take account of the numbers of children in each family are not possible.
§ Mr. Nigel GriffithsTo ask the Chancellor of the Exchequer if he will publish in theOfficial Report the tax-unit and tax cut statistics for the income ranges £5,000 to £7,500, £7,500 to £10,000, £50,000 to £70,000, and over £70,000, in the same manner as the reply on 19 April, Official Report, columns 419–20.
§ Mr. Norman Lamont[holding answer, 5 May 1988]: Estimates for the income ranges requested are as follows. The table shows the estimates of reductions in income tax liabilities at 1988–89 income levels, of the proposed 1988–89 allowances, thresholds and rates, compared with an indexed 1978–79 regime. For the comparison, the 1978–79 allowances and thresholds have been indexed in line with the increase in the retail price index between 422W December 1977 and December 1987. As child tax allowances were being phased out in 1978–79, they have been excluded from the comparison.
Range of income in 1988–891 Number of units paying tax in 1988–89 Reductions in income tax compared with 1978–79 indexed regime £ (Million) Amount (£ Million) Average per tax unit (£) 5,000–7,500 3.70 1,030 2270 7,500–10,000 3.30 1,460 2440 50,000–70,000 0.15 1,250 9,160 Over 70,000 0.10 3,530 37,550 1 All information is in terms of tax units, that is, married couples are counted as one unit and their incomes combined. 2 By reference to the estimated numbers who would be liable to pay tax under the indexed 1978–79 regime; this number is some 1,100,000 greater than the numbers expected to pay tax in 1988–89, some 175,000 in the range £5,000 to £7,500, and 25,000 in the range £7,500 to £10,000.
§ Mr. Nigel GriffithsTo ask the Chancellor of the Exchequer if he will publish in theOfficial Report the table of real changes in the various categories of tax between 1978–79 and 1988–89, using the same format of his reply given on 1 May 1987, Official Report, column 295.
§ Mr. Norman Lamont[holding answer 5 May 1988]: I would refer the hon. Member to the answer I gave on 22 March 1988 to the hon. Member for Birmingham, Perry Barr (Mr. Rooker), at columns 97–8.