Tax Cuts: Fiscal Impact

Baroness Ritchie of Downpatrick Excerpts

Wednesday 13th July 2022 Lords Chamber

[Baroness Penn (Con)]

I can reassure the noble Lord that the threshold at which the tax is paid is different from that at which the credits towards contributory benefits are earned, so increasing the threshold where people are paying the tax has not affected their ability to accrue those rights.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, could the Minister explain how the Government will reconcile tax cuts, which seem to be the subject for the majority of Conservative Party leadership candidates, with the pressing need to bear down on inflation and high costs?

[Baroness Penn (Con)]

It is possible to put more money into people’s pockets—for example, through the national insurance threshold rise—without having a disproportionate impact on inflation. Similarly, we have been able to make our cost of living payments while bearing in mind the noble Baroness’s exact point: we need to be careful of inflation as we make those policy changes.