asked the Chancellor of the Exchequer if he will list for a two-child family the combined value of family allowance and child tax allowance for a standard rate taxpayer as a percentage of the average industrial take-home earnings for the years 1968 to 1976.
With permission, I will circulate the full information in the Official Report. Although there has been some fluctuation, the combined value of the family allowance and child tax allowance as a percentage of average industrial take-home earnings has declined slightly from 10·6 per cent. in 1968–69 to 8·7 per cent. in 1975–76.
Will the Government recognise that this is at the heart of the whole problem of incentive to work, and that a person on average earnings with two children is only £12 a week better off than if he were not working?
We have recognised that. As I said, there has been some reduction in the real value of these allowances. In framing taxation policy that is one factor of which we have to take account.
I am sure that my right hon. Friend will note my hon. Friend's suggestion.
The figures that I mentioned show that there has been some shift and that the real value of the child allowance has fallen. I accept that there has been some shift of the burden from people without children to people with children.
1. Take-home earnings are the annual equivalent of the average earnings—less tax and National Insurance contributions—of full-time male manual workers aged 21 and over in manufacturing and certain other industries at October of each year. The National Insurance contributions relate to an adult male worker not "contracted out" of the Graduated Pension Scheme, and include graduated contributions.