§ Mr. MacleanTo ask the Chancellor of the Exchequer using the assumptions underpinning the calculations made in the 1996 Budget, if he will calculate the(a) direct taxes and (b) indirect taxes paid by the average family in the UK as a result of (i) the 1997 Budget, (ii) the 1998 Budget and (c) the 1999 Budget. [111927]
§ Dawn PrimaroloFor estimates of direct taxes paid by the average family I refer the right hon. Member to the answer I gave the hon. Member for Truro and St Austell (Mr. Taylor) on 25 January 2000,Official Report, columns 214–15W.
Estimating the impact of indirect taxes is imprecise as spending patterns vary widely between households with the same composition and income, with the consumption of the majority of goods and services far from universal. For example, only around one third of adults are smokers, just over half the adult population are in households paying vehicle excise duty and around 10 per cent. of households pay air passenger duty. This can be contrasted with direct taxes and benefits where at specified earnings and for particular household types there is a known benefit entitlement or tax liability.
§ Mr. Matthew TaylorTo ask the Chancellor of the Exchequer, pursuant to his answer of 25 January 2000,Official Report, columns 214–15W, on taxes, what proportion of households are a one-earner married couple, with two children, on male median earnings; what proportion of earners earn within five per cent. of male median earnings; what proportion of households comprise a one-earner couple with two children; and if he will recalculate his answer to apply to a two-earner household where both earners are employed, one on male median earnings and one on female median earnings, with two children. [110213]
158W
§ Dawn Primarolo[holding answer 16 February 2000]: According to the Family Expenditure Survey 1995–96 to 1997–98, 12.6 per cent. of households are one-earner couples with 2 children. The proportion of these couples who are married is not readily available.
According to the New Earnings Survey, in 1999 8.3 per cent. of males working full-time on adult rates earned within 5 per cent. of median earnings.
Percentage of income paid in direct taxes by a two earner couple where both earners are employed, one on male median earnings
and one on female median earnings, with two children
Year Percentage 1983–84 24.0 1984–85 23.5 1985–86 23.4 1986–87 23.1 1987–88 22.5 1988–89 21.7 1989–90 21.5 1990–91 21.2 1991–92 21.1 1992–93 20.4 1993–94 20.5 1994–95 21.8 1995–96 22.2 1996–97 21.4 1997–98 20.8 1998–99 20.8 1999–00 20.2 2000–01 20.1 2001–02 18.9 Notes:
1. Direct taxes are defined as Income Tax plus National Insurance minus Child Benefit. In line with long-standing convention, Child Benefit is treated as a negative component of Income Tax, making it consistent with child tax allowances prior to 1976.
2. Earnings are taken to be median weekly earnings of full-time employees on adult rates with pay unaffected by absence form the New Earning Survey. Median earnings on a consistent basis are not available before 1983.
By 2001 the tax burden for the 2 earner married couple both on average earnings with 2 children will be below 20 per cent. for the first time ever.