National Minimum Wage

Treasury written question – answered on 1st May 2003.

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Photo of Mr Andy King Mr Andy King Labour, Rugby and Kenilworth

To ask the Secretary of State for Trade and Industry, for a couple with one child under 16 and one adult in work for 35 hours a week receiving the National Minimum Wage of £4.50 an hour from April, by how much she estimates the 30p a week increase in the National Minimum Wage will be eroded by (a) the resulting increase in national insurance contributions, (b) the resulting reduction in housing and council tax benefits, (c) the average increase in council tax on band D in London, (d) the average increase in social housing rents by local authorities and (e) the average increase in social housing rents by housing associations in London.

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

As a result of the increase in the National Minimum Wage to £4.50 and the introduction of the Working and Child Tax credits a couple with one earner working full time on the National Minimum Wage will be £6.93 per week better off in real terms from October 2003 than they were over 2002–03. This includes the impact of the rise in National Insurance Contributions.

Even after average increases (across England) in rents and Council Tax this family will be £2.39 better off per week. Only some households in these circumstances will be eligible for Housing or Council Tax Benefit.

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