§ Mr. WhittingdaleTo ask the Secretary of State for Social Security (1) how many people faced marginal tax rates, including social security of over(a) 40 per cent., (b) 50 per cent., (c) 60 per cent., (d) 70 per cent., (e) 80 per cent., (f) 90 per cent. and (g) 100 per cent. in each year since 1996–97; [82237]
(2) how many people will face marginal tax rates including social security of over (a) 40 per cent., (b) 50 per cent., (c) 60 per cent., (d) 70 per cent., (e) 80 per cent., (f) 90 per cent. and (g) 100 per cent. taking account of the introduction of the working family tax credit and the children's tax credit. [82236]
§ Dawn PrimaroloI have been asked to reply.
The data requested are contained in the table. The table illustrates the combined effect of the 1999 Budget and the Government's reforms since the election which will see the numbers of those facing marginal rates of over 70 per cent. reduced by two thirds, significantly relieving the poverty trap.
The increased generosity of the Working Families Tax Credit (WFTC) compared with Family Credit will see an extension of in work support for families with children. Even those whose marginal rate increases as a result of this change will be better off in cash terms and see an increased return to working compared to being on benefit. On average, WFTC will give low earning families an extra £24 per week compared with Family Credit.
173W Available historical estimates of marginal deduction rates are published in the DSS's annual departmental report, on page 16 of the 1998 report and page 57 of the 1997 report.
Impact of the 1998 and 1999 budgets on the number of families with marginal deduction rates of 40 per cent. or more1 Thousand Before After 100 per cent. or more 5 0 90 per cent. or more 115 15 80 per cent. or more 255 175 70 per cent. or more 715 230 60 per cent. or more 730 950 50 per cent. or more 730 1,110 40 per cent. or more 775 1,150 1Figures are for families in receipt of income-related benefits or the WFTC where at least one partner works 16 hours or more, and are based on 1998–99 caseload and take-up rates.