§ Sir David KnoxTo ask the Chancellor of the Exchequer, pursuant to his answer of 3 February,Official Report, column 826, if he will show tax-free incomes, 13W defined as personal income tax allowances plus child benefits, as percentages of average male manual earnings for single-wage families with (a) one, (b) two, (c) three and (d) four children in each year since 1979–80.
§ Mr. DorrellThese figures should be interpreted with care as a £1 increase in child benefit is worth four tunes as much to a taxpayer with a marginal rate of 25 per cent. as a £1 increase in the personal allowance. The figures given in my answer of 3 February therefore give a more reliable picture of the effect of income tax allowances and child benefit on the incomes of the relevant families.
Personal allowance plus married couple's allowance1 plus child benefit expressed as a percentage of average male manual earnings2 Year With 1 child With 2 children With 3 children With 4 children 1979–80 39.0 43.0 47.0 51.1 1980–81 39.6 43.3 47–0 50.7 1981–82 36.4 40.3 44.2 48.1 1982–83 38.6 42.6 46.6 50.6 1983–84 40.8 45.0 49.1 53.3 1984–85 42.7 46.9 51.1 55.3 1985–86 43.7 47.8 51.9 56.0 1986–87 43.4 47.3 51.2 55.2 1987–88 41.7 45.5 49.3 53.1 1988–89 41.3 44.8 48.3 53.8 1989–90 40.5 43.1 46.9 50.1
Average impact of 1993 budget measures on households1 1994–95 1995–96 £ per week Percentage of net income £per week Percentage of net income All households 5.75 1.9 8.75 2.8 Pensioners 1.00 0.7 1.90 1.3 Poorest 20 per cent. 1.40 1.2 2.55 2.1 Richest 20 per cent. 12.00 2.0 16.70 2.8 1 Estimates based on the 1989–91 Family Expenditure Surveys, uprated to 1994–95 price and earnings levels on the basis of illustrative assumptions about price and earnings growth. The figures are relative to indexation and include the main tax measures directly affecting households. They are net of the increases in benefits to help meet higher fuel bills. The 1994–95 figure includes measures implemented between November 1993 and the November 1994 Budgets. The 1995–96 figures also includes other pre-announced measures to be implemented before the November 1995 Budget.
§ Ms HarmanTo ask the Chancellor of the Exchequer pursuant to his answer of 19 January,Official Report, columns 635–41, (1) if he will provide estimates in 1993–94 prices of the real disposable income after tax of similar family types across a similar range of incomes in 1993–94 and 1994–95;
Income after income tax and National Insurance contributions, 1993–94 £ per week Multiples of average earnings 50 75 100 150 200 300 400 500 700 1,000 2,000 Single 141.65 201.04 260.42 387.30 495.27 711.21 927.15 1,143.09 1,574.97 2,222.79 4,382.19 Married, one working, no children 149.92 209.31 268.69 398.24 508.50 724.44 940.38 1,156.32 1,588.20 2,236.02 4,395.42 Married, one working, two children 168.02 227.41 286.79 416.34 526.60 742.54 958.48 1,174.42 1,606.30 2,254–12 4,413.52 Married, both working, no children 168.72 231.87 291.58 410.34 530.18 774.31 1,003.77 1,219.71 1,651.59 2,299.41 4,458.81 Notes:
1. Income tax payments are calculated on the assumption that the household receives no tax reliefs other than the standard allowances and only has income from employment. All earners, including wives, are assumed to pay class 1 National Insurance Contributions at the contracted-in-rate.
2. Child benefit is included in the income of the married couple with two children.
3. Average earnings are taken to be the average gross weekly earnings of full-time males on adult rates with pay unaffected by absence. These are assumed to be £359.90 a week in 1993–94, based on the illustrative earnings growth assumption of 3.5 per cent. Where both partners are working, the husband and wife are assumed to share the relevant multiple of average male earnings in the ratio 60:40.
14W
Year With 1 child With 2 children With 3 children With 4 children 1990–91 40.1 43.1 46.1 49.0 1991–92 40.4 43.3 46.1 48.9 1992–93 40.1 42.9 45.8 48.7 1993–943 38.8 41.7 44.6 47.5 1 Married man's allowance for years up to 1990–91. 2 Full-time males paid at adult rates working a full week. 3 Assuming that the husband receives the full married couple's allowance Provisional.
§ Mr. PawseyTo ask the Chancellor of the Exchequer what will be the increase in the tax bill for a typical family in the next year compared with the current year; and what is the increase in earnings for the average family since 1979.
§ Mr. DorrellEstimates of the impact of the main tax-related measures in the 1993 Budgets are in the table. Since 1978–79, average gross male earnings have increased by 40 per cent. in real terms. Over the same period, real net take-home pay—after tax and inflation—has increased by the same amount.
(2) if he will provide estimates in 1993–94 prices of the real disposable income after tax of a married couple with two children on average earnings in 1993–94 and 1994–95.
§ Mr. Dorrell[holding answer 10 March 1994]: Estimates of disposable income in 1993–94 for the hypothetical families requested are in the table. Real disposable income in 1994–95 will depend on what happens to earnings and prices.