HC Deb 09 July 1998 vol 315 cc573-6W
Mr. Woolas

To ask the Chancellor of the Exchequer (1) what estimate he has made of the net wage at 1998–99 prices for a single person, working 39 hours a week for(a) £3.60 an hour, (b) £3.70 an hour, (c) £4 an hour and (d) £4.26 an hour for (i) 1997–98, (ii) 1998–99, (iii) 1999–2000 and (iv) 2000–2001; [48186]

(2) what estimate he has made of the net wage at 1998–99 prices for a married person with (a) one child and (b) two children under 12, who is the main wage earner, working 39 hours a week for (i) £3.60 an hour, (ii) £3.70 an hour, (iii) £4 an hour and (iv) £4.26 an hour for (1) 1997–98, (2) 1998–99, (3) 1999–2000 and (4) 2000–2001. [48185]

Dawn Primarolo

The table gives the weekly net income (at 1998–99 prices) of a single person, a married couple with one child, and a married couple with two children, at different hourly wage rates.

As the final column of the table shows, the National Minimum Wage and Budget measures such as the Working Families Tax Credit will mean a significant boost for low income working families: every family with children will be guaranteed an income for full-time work of at least £180 a week.

Family type Hourly wage rate (at 1998–99 prices) 1997–98 (at 1998–99 prices) 1998–99 1998–99 (including Budget measures due to be introduced in 1999–2000
Single person £3.60 119.36 119.53 120.81
£3.70 122.09 122.26 123.54
£4.00 130.28 130.45 131.73
£4.26 137.22 137.47 138.75
Married person, one child £3.60 176.46 176.20 193.91
£3.70 177.28 177.02 195.14
£4.00 179.74 179.48 198.82
£4.26 181.82 181.59 201.98
Married person, 2 children £3.60 198.09 197.85 218.06
£3.70 198.91 198.67 219.29
£4.00 201.37 201.13 222.97
£4.26 203.45 203.24 226.13

The income figures are net of Income Tax (including Working Families Tax Credit in the last column), National Insurance Contributions, Child Benefit and Family Credit (where appropriate). The figures do not include any Housing Benefit or Council Tax Benefit the households may be eligible for; this would depend upon rent and council tax bills. The net incomes shown would be higher if these benefits were applicable and included in the figures.

The figures assume that the earner is paying contracted-in employees' NICs', that they have no other, non-earned, income, and that they work 39 hours a week.

Figures for 1999–2000 and 2000–2001 are not available; they will depend upon any changes in tax and benefit rates and the rate of inflation.

The Bank of England has played a leading role in facilitating preparation for the euro in the financial sector. All indications are that the City is ready for the launch of the euro and expects to maintain its position as Europe's leading financial centre.

Ms Ryan

To ask the Chancellor of the Exchequer (1) how many people in full-time employment in the Greater London area currently earn less than the proposed national minimum wage development rate for 18 to 21-year-olds; [49458]

(2) how many people in full-time employment in Enfield currently earn less than the proposed national minimum wage development rate for 18 to 21-year-olds; [49455]

(3) how many people in the constituency of Enfield, North earn less than the proposed national minimum wage, broken down by (a) gender, (b) age (c) ethnic origin and (d) full or part-time employment. [49457]

Mrs. Liddell

The information requested falls within the responsibility of the Chief Executive of the Office for National Statistics. I have asked him to reply.

Letter from Tim Holt to Ms Joan Ryan, dated 9 July 1998: As Director of the Office for National Statistics (ONS), I have been asked to reply to your parliamentary questions (49455, 49457 and 49458) on earnings. The national minimum wage (NMW) will become effective in April 1999 and has been set at £3.60 for employees aged over 21. A development rate of £3.00 per hour will apply for employees aged 18 to 21. The proposals also include a provision for a rate of £3.20 which will apply to those over 21 years receiving accredited training during the first six months of a new job with a new employer, but we are unable to provide data on this. Workers aged 16 and 17 and all those on apprenticeship with be exempt. The Low Pay Commission, in arriving at their recommendations, had to adjust 1999 pay rates to 1997 values. Their methodology produces £3.40 and £2.80 as the 1997 values of the government's preferred rates and I have provided supplementary data for these levels. The new Earnings Survey (NES) does not collect information on the ethnic origin of employees, therefore figures for this element of the question cannot be given. The preferred method for assessing the coverage of the proposed NMW is to present adjusted NES and Labour Force Survey (LFS) data for the number of employees earning less than the proposed NMW rates. This method adjusts for the fact that the NES is based on a one per cent. sample of employees in the PAYE system and is therefore likely to under-represent relatively low paid staff, earning below the tax-threshold, and in particular those who work part-time. It is not possible to use this method for the data requested for these areas and, where it is available, data, solely from the NES, have been provided in the attached tables. Regrettably, NES cannot provide statistically reliable estimates for much of the information requested for Enfield North constituency and Enfield borough. The extent of the bias in the NES data may be estimated for Greater London by using the adjusted NES and LFS data for all employees. This suggests that the estimate of the overall proportion of full-time employees aged 18 to 21 years earning below £3.00 could understate the true position by as much as 12 percentage points. The equivalent figure for those aged over 21 years earning below £3.60 is 2 percentage points. However, because the bias has been estimated on the basis of all employees, it would be wise to treat these figures as broadly indicative rather than as precise estimates for full-time employees. NES—April 1997 (GB) Employees, whose pay for the survey period was unaffected by absence.

Greater London—employees aged 18 to 21 on all rates of pay
1Percentage earning
Less than £2.80 Less than £3.00
Full-time males 2.3 3.1
Full-time females 4.0 4.7
All full time employees 3.2 3.9
1Hourly earnings excluding overtime and shift payments (£)

Enfield North constituency—employees aged 18 to 21 on all rates of pay
1Percentage earnings
Less than £2.80 Less than £3.00
Full-time males 2 2
Part-time males 2 2
All males 2 2
Full-time females 2 2
Part-time females 2 2
All females 2 2
All full-time employees 2 2
All part-time employees 2 2
All employees 2 2
1Hourly earnings excluding overtime and shift payments (£)
2A reliable estimate is unavailable

Enfield North constituency—employees aged over 21 on adult rates of pay
1Percentage earnings
Less than £3.40 Less than £3.60
Full-time males 2 2
Part-time males 2 2
All males 2 2
Full-time females 2 2
Part-time females 2 2
All females 6.0 7.3
All full-time employees 4.6 4.6
All part-time employees 2 2
All employees 6.0 6.7
1Hourly earnings excluding overtime and shift payments (£)
2A reliable estimate is unavailable

Enfield borough—employees aged 18 to 21 on all rates of pay
1Percentage earnings
Less than £2.80 Less than £3.00
Full-time males 2 2
Full-time females 2 2
All full-time employees 2 2
1Hourly earnings excluding overtime and shift payments (£)
2A reliable estimate is unavailable