Taxation: Personal Thresholds

Debate between Lord Newby and Baroness Eaton

Monday 20th January 2014 Lords Chamber

[Baroness Eaton]

To ask Her Majesty’s Government how many people on the lowest incomes have been lifted out of income tax by the rise in personal tax thresholds since 2010.

[Lord Newby (LD)]

My Lords, by 2013-14, 2.4 million low-income individuals have been taken out of income tax altogether as a result of this Government’s increases to the personal allowance since 2010. This number will increase to 2.7 million once the personal allowance reaches £10,000 in April 2014.

[Baroness Eaton (Con)]

I thank the Minister for that Answer. The significant changes to the personal allowance mean that someone working full time on the minimum wage has seen their income tax bill more than halved under this Government. Does he agree that this is the most effective way to support those on low and middle incomes because it enables them to keep more of the money they earn?

[Lord Newby]

My Lords, I do agree. The effect of what we have done is that by 2014-15 there will be a £705 cash benefit to low-income households, which even in real terms is well over £500. This has made a material difference to the income of people in those categories and is much to be welcomed.