§ Mr. Nigel GriffithsTo ask the Chancellor of the Exchequer what is the proportion of gross income paid in 121W income tax, national insurance contributions and value added tax by (a) a married man with a non-earning wife and two children and (b) a married man with an earning wife and two children at one half, one and a half, two, three, five and 10 times national average earnings in 1989–90; and what were the comparable figures in 1978–79.
Married man with non-earning wife and two children Multiples of average male earnings Proportion of gross earnings ½ 1 1½ 2 3 5 10 1978–79 Income tax -4.1 14.4 20.6 23.6 32.0 47.1 64.7 NICs 6.5 6.5 5.6 4.2 2.8 1-7 0.8 VAT — 2.7 2.7 — — — — 1989–90 Income tax -1.0 12.0 16.4 20-2 26.8 32.1 36.1 NICs 7.9 8.4 6.8 5.1 3.4 2.0 1.0 VAT — 5.0 5.7 — — — —
Married man with non-earning wife and two children Multiples of average male earnings Proportion of gross earnings ½ 1 1½ 2 3 5 10 1978–79 Income tax -11.1 6.4 15.2 19.7 25.9 329 50.6 NICs 6.5 6.5 6.5 6.5 5.4 3.4 1.7 VAT — 3.4 3.4 — — — — 1989–90 Income tax -10.6 71 13.1 16.3 20.7 27.0 33.6 NICs 5.4 7.5 8.3 8.4 6.8 4.1 2.0 VAT — 5.9 6.0 — — — — Notes:
1. Average male earnings in 1989–90 are assumed to be £273.10 per week, 7½ per cent. higher than in 1988–89. This represents a real increase of over 30 per cent. since 1978–79.
2. Child benefit is treated as a negative income tax.
3. Earners, including working wives, are assumed to pay class 1 National Insurance contributions at the contracted in rate. The figures for National Insurance contributions are financial year averages.
4. The two earner couple is assumed to have joint earnings equal to the various multiples of average earnings, split between husband and wife in the ratio 60:40.
5. The estimates of VAT are derived from the 1985 family expenditure survey and are based on the illustrative assumption that 10 per cent. of disposable income is saved. Estimates cannot reliably be made outside the range of 75 per cent. to 150 per cent. of average male earnings.