Supplementary Note submitted by Mr Nicholas
Mostyn QC (CS 42)
1. I was taken to task on the figures that
appeared Annex A.2 of my paper by Mr Pond MP.
2. I should point out that this is an Annex
to my 1998 response to the Green Paper and is thus a year out
of date.
3. It was suggested that in taking the median
point between the average 1997 male manual and non-manual earnings
I had in some way created an unrepresentative hypothetical non-residential
parent, and that 70 per cent of the working population would earn
less than him.
4. I do not want to be drawn into an argument
as the point can be equally well made over a range of figures.
5. I insert a table that analyses liability
over a range of incomes. The table specifies the exemplified income
in question.
TABLE ILLUSTRATING REDUCTIONS IN PAYMENTS
Assume one child age 7, mother (carer), has
no income
Father has housing costs of £50 per
week
|
Gross
Pay | Net
pay
| Net weekly pay | Employment
example
| Present liability | Proposed
liability
|
Difference | Percentage
Difference
|
|
| 8,327 | 7,000 | 134.62
| Nursing Auxiliary (£8,705) | 5.15
| 14.00 | (8.85) | -171.8%
|
| 15,869 | 12,000 | 230.77
| Teacher Grade 3 (£16,383) | 64.69
| 35.00 | 29.69 | 45.9%
|
| 18,886 | 14,000 | 269.23
| Average male
manual earnings
1998 (£17,082)
| 74.94 | 40.00 | 34.94
| 46.6% |
| 24,920 | 18,000 | 346.15
| Average male
non manual earnings
1998 (£26,317)
| 86.48 | 52.00 | 34.48
| 39.9% |
|
6. The figures throw up a very interesting point which
I had not previously noticed, and that is that at the very bottom
of the economic scale the proposed reforms will very substantially
increase liability. The nursing auxiliary with a net weekly pay
of £134 will see his liability increase by 172 per cent from
£5.15 to £14.00.
7. Around average national earnings there will be substantial
reductions in liability of around 46 per cent. The extent of the
reduction decreases at levels above average earnings.
8. I would suggest therefore that Mr Pond's criticism
of my thesis is misplaced. The reality is that the proposed reforms
will in cases involving average earnings result in substantial
reductions. In non-benefit cases this will redound to the disadvantage
of the child; in benefit cases it will be the tax-payer who loses.
15 September 1999
|
