§ Mr. Chris Smith
To ask the Chancellor of the Exchequer if he will indicate how, in detail, he has arrived at the figure of 27½ per cent. as the rise in real take-home pay for a married man with two children on average earnings between 1978–79 and 1988–89, as given in response to the hon. Member for Harrow, West (Mr. Hughes) on 14 April,Official Report, column 339.
§ Mr. Norman Lamont
The detailed calculations are in the table.
The earnings figures are derived from the new earnings survey series for full-time males on adult rates, whose pay was not affected by absence. The 1978–79 figure has been adjusted to take account of a change in definition of the series in 1983. The 1988–89 figure has been projected from 1986–87 using the assumptions of a 7½ per cent. increase between 1986–87 and 1987–88 and a 6½, per cent. increase between 1987–88 and 1988–89, as provided to the Government Actuary and reported in chapter 3 of the autumn statement 1987.
The retail prices index for 1978–79 has been rebased to 13 January 1987 = 100, the base of the current RPI series. The RPI is assumed to rise by 4 per cent. between 1987–88 and 1988–89.
Calculation of real take home pay for a married man with two children on average earnings £ per week 1978–79 1988–89 Earnings 92.80 244.70 Income tax -18.46 -41.49 NIC -6.03 -22.02 Child benefit +5.14 +14.50 Take home pay 73.45 195.69 RPI 51.10 106.80 Take-home pay at constant 1988–89 prices 153.51 195.69 Percentage increase 27.50