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Red Book

Treasury written question – answered on 16th May 2002.

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Photo of David Willetts David Willetts Shadow Secretary of State for Work and Pensions

To ask the Chancellor of the Exchequer, pursuant to his answer of 1 May 2002, Official Report, columns 882–83W, on the Budget Red Book, if he will provide figures for each column in respect of marginal deduction rates (a) over 30 per cent. (b) over 20 per cent. and (c) over 10 per cent.

Photo of Ruth Kelly Ruth Kelly Economic Secretary, HM Treasury

The following table shows estimates of the number of families facing marginal deduction of (a) over 30 per cent. (b) over 20 per cent. and (c) over 10 per cent.

Number of households facing MDRs (cumulative)
Marginal deduction rate Before Budget 1998 2002–03 system of tax and benefits After introduction of NTCs
Over 30 per cent. 810,000 1,200,000 1,960,000
Over 20 per cent. 820,000 1,210,000 2,040,000
Over 10 per cent. 830,000 1,235,000 2,050,000

The figures in the table, which cover the number of households in receipt of either income related benefits of the working families tax credit (WFTC) or new tax credits from April 2003, where at least one person works at least 16 hours or more, include the effects of income tax and national insurance contributions, and the withdrawal of housing benefit and council tax benefit.

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