DETAILS

87

ingly. Put into figures the distribution of theburden aimed at is the following:—

Income-Group

Below £250

Above £250

Total

million

million

million

Increased Taxes 1

£150

£350

£500

Deferment of Earnings

250

350

600

Loss through relative rise

in the cost of living

125

50

175

£525

£750

£1275

Less increase in war incomes 425

400

825

£100

£350

£450

Less family allowances 2 .

£100

—

£100

Decrease in real consump-

tion ....

nil

£350

£350

The loss, estimated above, due to a rise in thecost of living relatively to wages, allows for a costof living 10 per cent above pre-war only partiallyoffset by a 5 per cent rise in wages. This is,roughly speaking, the present position. Theestimate assumes that the higher income-groupwill be somewhat less affected by this factor thanthe lower.

In terms of pre-war real consumption the finalresult means, very roughly, that the aggregateconsumption of the higher income group will bereduced by fully a third and the aggregate con-sumption of the lower income group not at all.

1 Including increased yield of pre-war taxes.

8 For the sake of simplicity, I am assuming that the existing incometax allowances for children already cost on the average 5s. per childfor the income group about £250, which may or may not be correct.Probably it is an overstatement, since the allowance works out at3s. 9d. per child up to about £400 earned income, gradually risingthereafter to 7s. 6<i.