Taxation: Income Tax Threshold

Debate between Baroness Seccombe and Lord O'Neill of Gatley

Wednesday 16th March 2016 Lords Chamber

[Baroness Seccombe]

To ask Her Majesty’s Government by how much the amount a person can earn before paying tax has changed since the 2010 Budget; and how many people have been affected by this change.

[The Commercial Secretary to the Treasury (Lord O'Neill of Gatley) (Con)]

My Lords, since the 2010 Budget, the amount a person can earn before paying tax has increased by more than 60%, from £6,475 in 2010-11 to £10,600 in 2015-16 this tax year. Next month, it will increase again to £11,000, and in today’s Budget the Chancellor of the Exchequer has announced that it will rise by a further £500 in April 2017 to £11,500. A considerable number of taxpayers will benefit from these changes.

[Baroness Seccombe (Con)]

My Lords, that is an amazing figure, which I am sure we will all appreciate. It is especially important for young people. However, tax is only part of the issue; wages are also important. Can my noble friend tell the House how much the increased minimum wage will help the young, and how many will be affected?

[Lord O'Neill of Gatley]

My Lords, I welcome my noble friend’s phraseology. From October 2016, the new national minimum wage rate will mean a pay rise of up to £450 a year for nearly half a million young workers. The Government will increase the main national minimum wage rate to £6.95, 25p more than the current rate. This is the largest increase since 2008 in cash terms. It is expected to reach its highest level ever in real terms, surpassing its pre-recession peak.