Economic Inequality

Debate between Lord Greaves and Lord Newby

Wednesday 23rd October 2013 Lords Chamber

[Lord Greaves]

To ask Her Majesty’s Government what proposals they have to reduce the level of economic inequality.

[Lord Newby (LD)]

My Lords, income inequality in the UK is now at its lowest level since 1986. The Government are committed to ensuring that all families benefit from the return of growth to the economy and maintain that the best route out of poverty and the best way of reducing inequality is for households to move into work.

[Lord Greaves (LD)]

My Lords, last week we had the report of the Social Mobility and Child Poverty Commission, State of the Nation 2013, under the leadership of Mr Alan Milburn and the noble Baroness, Lady Shephard. It concludes that:

“Britain remains a deeply divided country. Disadvantage still strongly shapes life chances. A balanced economic recovery, between different parts of Britain, is not currently within reach”.

Do the Government agree with the broad conclusions of the report that, if we want more social mobility, that has to go hand in hand with a more equal society?

[Lord Newby]

My Lords, the Government agree with the broad conclusions of the report. As the noble Lord says, there are major problems of deep-seated, regional inequalities and imbalances. However, the Government are committed to tackling these, which explains why we have committed more than £2.6 billion to the regional growth fund, why we are committed to High Speed 2 and why apprenticeships, which now stand at 850,000 in the last academic year—some 370,000 more than in the last year of the Labour Government—are taking place largely outside London and the south-east.

Taxation: Income Tax

Debate between Lord Greaves and Lord Newby

Wednesday 6th March 2013 Lords Chamber

[Lord Greaves]

To ask Her Majesty’s Government what measures they will take to ensure that wage-earners who are below the income tax threshold will benefit from any future increases in the personal allowance.

[Lord Newby]

My Lords, since 2010 the Government have announced successive increases in the personal allowance totalling £2,965. Taken together, these changes will ensure that more than 2.2 million low-income individuals will be removed from income tax altogether. The Government are also taking other measures that will benefit those who are below the income tax threshold, including the introduction of universal credit, support on childcare and the pupil premium.

[Lord Greaves]

My Lords, some 4,300,000 employees already earn too little to benefit from the increase in the personal allowance this year—which I fully support—and this will rise to nearly 5 million workers in 2013-14, about 17% of the labour force, of which two-thirds will be women. How can it be right or fair that a policy trumpeted as helping low-paid workers does nothing for the lowest-paid 5 million? Will the Government look seriously at new ways to end this unfair situation?

[Lord Newby]

My Lords, some of those 5 million were paying income tax until we took them out of income tax, so they have benefited significantly from the changes that we made. The vast bulk of those 5 million are people in work who are not working full time, so one of the key things that we have to try to ensure is that more people are working full time. One of the better statistics on the labour market—which had a good year in many respects last year—is that 32,000 people who were working part time and who wanted to work full time got full-time jobs in the last quarter of last year.