§ Ms HarmanTo ask the Chancellor of the Exchequer (1) if he will provide estimates for the years 1978–79 to 1995–96 of the proportion of income taken in(a) direct tax, (b) indirect tax and (c) total tax for single pensioners aged over 75 years on (i) average pensioner income, (ii) half average pensioner income and (iii) twice average pensioner income;
(2) if he will provide estimates for the years 1978–79 to 1995–96 of the proportion of income taken in (a) direct tax, (b) indirect tax and (c) total tax for single pensioners aged 65 to 74 years on (i) average pensioner income, (ii) half average pensioner income and (iii) twice average pensioner income;
(3) if he will provide estimates for the years 1978–79 to 1995–96 of the proportion of income taken in (a) direct tax, (b) indirect tax and (c) total tax for pensioner couples aged 65 to 74 years on (i) average pensioner income, (ii) half average pensioner income and (iii) twice average pensioner income;
(4) if he will provide estimates for the years 1978–79 to 1995–96 of the proportion of income taken in (a) direct tax, (b) indirect tax and (c) total tax for pensioner couples aged over 75 years on (i) average pensioner income, (ii) half average pensioner income and (iii) twice average pensioner income.
§ Mr. Dorrell[holding answer 19 May 1994]: Figures for direct tax payments are in the table. Information on indirect tax payments is not available. For the hypothetical family types examined, real after-tax income rose, between 1978–79 and 1992–93, by over £30 per week for the single pensioner with an average income and by over £80 per week for a couple at 1992–93 prices.
358W
Income tax as percentage of gross income Multiples of average pensioner income ½ 1 2 Single aged 65–74 1978–79 0 3.8 17.0 1979–80 0 2.5 15.4 1980–81 0 3.3 16.6 1981–82 0 7.6 18.8 1982–83 0 6.4 18.2 1983–84 0 5.4 17.7 1984–85 0 5.1 17.6 1985–86 0 4.2 17.1 1986–87 0 4.8 16.9 1987–88 0 6.1 16.5 1988–89 0 5.0 15.0 1989–90 0 5.5 15.3 1990–91 0 6.4 15.7 1991–92 0 6.9 16.0 1992–93 0 6.1 15.5 Increase in real net income, after tax 1978–79 to 1992–93 (percentage) 44.7 41.3 47.5 Single aged 75+ 1978–79 0 3.8 17.0 1979–80 0 2.5 15.4 1980–81 0 3.3 16.6 1981–82 0 7.6 18.8 1982–83 0 6.4 18.2 1983–84 0 5.4 17.7 1984–85 0 5.1 17.6 1985–86 0 4.2 17.1 1986–87 0 4.8 16.9 1987–88 0 5.3 16.1 1988–89 0 4.2 14.6 1989–90 0 4.7 14.9
Multiples of average pensioner income ½ 1 2 1990–91 0 5.7 15.3 1991–92 0 6.2 15.6 1992–93 0 5.5 15.1 Increase in real net income, after tax 1978–79 to 1992–93 (percentage) 44.7 42.1 48.1 Couple, aged 65–74 1978–79 0 8.4 23.7 1979–80 0 7.1 21.4 1980–81 0 7.8 21.8 1981–82 0 11.5 23.1 1982–83 0 9.8 22.5 1983–84 0 10.3 22.7 1984–85 0 9.7 21.9 1985–86 0 10.3 22.0 1986–87 0 10.3 21.4 1987–88 0 11.5 20.7 1988–89 0 10.6 19.2 1989–90 0 10.2 19.0 1990–91 0 2.8 13.9 1991–92 0 3.6 15.0 1992–93 0 3.0 14.4 Increase in real net income, after tax 1978–79 to 1992–93 per cent. 46.9 55.6 64.7 Couple, aged 75+ 1978–79 0 8.4 23.7 1979–80 0 7.1 21.4 1980–81 0 7.8 21.8 1981–82 0 11.5 23.1 1982–83 0 9.8 22.5 1983–84 0 10.3 22.7 1984–85 0 9.7 21.9 1985–86 0 10.3 22.0 1986–87 0 10.3 21.4 1987–88 0 10.9 20.7 1988–89 0 10.1 19.2 1989–90 0 9.8 19.0 1990–91 0 2.3 13.5 1991–92 0 3.1 14.6 1992–93 0 2.6 14.0 Increase in real net income, after tax 1978–79 to 1992–93 per cent. 46.9 56.2 65.5 Notes:
1. The estimates use figures for the average gross incomes of singles and couples where the head is over 65 obtained from the Family Expenditure Survey. These figures are for calendar years and are only available up to 1992. Separate figures for the average incomes of those aged 65–74 and over 75 are not readily available. All figures are subject to sampling error. They are also not strictly comparable over time because of changes in the Family Expenditure Survey.
2. The estimates assume that all income is taxable and that the pensioners have no tax allowances other than the personal and married couple's allowance.
3. Gross income is assumed to be split between the husband and wife in the ratio 70:30. None of the wife's income is assumed to be from earnings.
§ Ms HarmanTo ask the Chancellor of the Exchequer (1) if he will provide estimates for the years 1978–79 to 1995–96 of the level of income at which pensioner couples aged over 75 years start to pay income tax(a) in cash prices, (b) in 1994–95 prices, (c) expressed as a proportion of average earnings and (d) expressed as a proportion of average pensioner income;
(2) if he will provide estimates for the years 1978–79 to 1995–96 of the level of income at which pensioner couples aged 65 to 74 years start to pay income tax (a) in cash 359W prices, (b) in 1994–95 prices, (c) expressed as a proportion of average earnings and (d) expressed as a proportion of average pensioner income.
§ Mr. Dorrell[holding answer 19 May 1994]: Only 30 per cent. of pensioners currently pay income tax. Available information on tax thresholds is given in the
Tax threshold1 at current prices Tax threshold1 at constant 1994–95 prices2 Tax threshold1 as percentage of average earnings3 Tax threshold1 as percentage of average income of a pensioner couple4 Aged 65–74 £ 5Aged 75 or over £ Aged 65–74 £ 5Aged 75 or over £ Aged 65–74 Per cent. 5Aged 75 or over Per cent. Aged 65–74 Per cent. 5Aged 75 or over Per cent. 1978–79 2,075 2,075 5,933 5,933 43 43 68 68 1979–80 2,455 2,455 6,059 6,059 43 43 73 73 1980–81 2,895 2,895 6,139 6,139 42 42 74 74 1981–82 2,895 2,895 5,507 5,507 38 38 62 62 1982–83 3,295 3,295 5,856 5,856 40 40 67 67 1983–84 3,755 3,755 6,379 6,379 42 42 66 66 1984–85 3,955 3,955 6,392 6,392 41 41 68 68 1985–86 4,255 4,255 6,496 6,496 41 41 66 66 1986–87 4,505 4,505 6,662 6,662 41 41 65 65 1987–88 4,675 4,845 6,651 6,892 38 40 58 60 1988–89 5,035 5,205 6,755 6,983 38 39 57 59 1989–90 5,385 5,565 6,701 6,925 37 38 59 61 1990–91 5,815 6,005 6,601 6,817 37 38 59 61 1991–92 6,375 6,575 6,904 7,121 37 38 56 57 1992–93 6,665 6,875 7,000 7,221 37 38 55 57 61993–94 6,665 6,875 6,882 7,098 36 37 N/a N/a 61994–95 6,865 7,075 6,865 7,075 35 36 N/a N/a 1 Married man's allowance for years prior to 1990–91. Personal allowance plus married couple's allowance for 1990–91 onwards. 2 Assumes a growth in the retail prices index of 3.25 per cent. in 1994–95 in line with the forecast in the November 1993 Financial Statement and Budget Report. 3 Average earnings are taken to be the average gross annual earnings of all full-time males on adult rates with pay unaffected by absence. These are assumed to be equivalent to £347.70 a week in 1992–93, £359.90 in 1993–94 and £374.40 in 1994–95, based on illustrative earnings growth assumptions of 3½ per cent. in 1993–94 and 4 per cent. in 1994–95. 4 Average income of a pensioner couple is derived from Family Expenditure Survey data and relates to calendar years. It is not possible to separately identify wife's income and so all income is assumed to be taxed as the husband's income. 5 Aged 80 or over for 1987–88 and 1988–89. 6 Provisional.