§ Mr. Frank Field
asked the Secretary of State for Social Services if he will publish a table giving details of the effects of his proposed social security reforms on the marginal total effective deduction rates of low paid workers setting out the numbers affected by (a) the present system and (b) the proposed new system for those forgoing 50 to 60 pence, 60 to 70 pence, 70 to 80 pence, 80 to 90 pence, 90 pence to £1 and over £1 for each additional £1 in earnings; and if he will also publish comparable data taking into account the 20 per cent. rates payments these families will have to pay.
§ Mr. Newton
The estimated numbers of families, including single persons, affected by the various marginal tax rates quoted are shown in the table. The estimates, which exclude families paying tax at higher than the standard rate, have been calculated on a similar basis to the figures in the illustrative tables prepared for the technical annex to the White Paper "Reform of Social Security". The marginal tax rates have been calculated as the sum of the extra income tax and employee's national insurance contribution paid—assumed as 9 per cent. —and the amounts by which means-tested benefits are reduced for every extra £1 of gross earnings. The estimates are necessarily approximate and should only be taken as illustrating the orders of magnitude involved.595W
Total marginal rate of deduction per extra £1 of gross earnings Current scheme Proposed new scheme—without 20 per cent. rates contribution Proposed new scheme—with 20 per cent. rates contribution 80p but less than 90p 160,000 420,000 410,000 90p but less than £1 60,000 40,000 40,000 £1 and over 70,000 nil nil