Asked by: Baroness Lister of Burtersett (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government why they changed the basis of the distributional analysis of the most recent budget presented in <i>Impact on Households</i> from that in previous such documents, and whether they plan to publish (1) the analysis on the same basis as hitherto, and (2) estimates up to 2019–20.
Answered by Lord O'Neill of Gatley
The Government published analysis of the impact of government policy across the income distribution alongside the Summer Budget. This set out a new approach to distributional analysis, abstracting from the level of government borrowing. Under the previous framework, a pound of extra borrowing would appear as a gain to households. But higher spending or lower taxes today would increase the deficit and the debt burden, with consequences for households in the future. The new analysis considers how policy decisions affect the share of tax and public spending paid by and received by households.
The analysis showed that decisions made by this government mean the poorest continue to receive the same share of public spending as they did in 2010-11, while the share of tax paid by the richest has increased.
Publishing analysis for 2017-18 reflects a compromise between including as much of the Summer Budget package as possible, and making as few assumptions as possible about changes in the wider economy into the future. By 2017-18 the majority of announced welfare measures have come into effect, as have most of the significant changes to the tax system. Analysis for 2016-17 would capture very few of the measures announced in the Summer Budget; analysis from 2018-19 onwards, would need to make substantial assumptions about changes in household incomes and inflation.
Asked by: Baroness Lister of Burtersett (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what proportion of people whose incomes are too low to be affected by the increase in personal tax allowances announced in the Budget have children.
Answered by Lord Deighton
Since 2010 this Government has lifted over three million people out of income tax.
In the income tax years 2016-17 and 2017-18, it is estimated that, for individuals aged over 16, whose income would be below the Personal Allowance before the Budget announced increases, 66% are female and 41% of those individuals have dependent children.
These estimates are derived from the results of the 2012-13 Family Resources Survey (FRS) projected forward to 2016-17 and 2017-18 using economic assumptions consistent with the Office for Budget Responsibility’s March 2015 economic and fiscal outlook.
Asked by: Baroness Lister of Burtersett (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what proportion of people whose earnings are too low to be affected by the increase in personal tax allowances announced in the Budget are women.
Answered by Lord Deighton
Since 2010 this Government has lifted over three million people out of income tax.
In the income tax years 2016-17 and 2017-18, it is estimated that, for individuals aged over 16, whose income would be below the Personal Allowance before the Budget announced increases, 66% are female and 41% of those individuals have dependent children.
These estimates are derived from the results of the 2012-13 Family Resources Survey (FRS) projected forward to 2016-17 and 2017-18 using economic assumptions consistent with the Office for Budget Responsibility’s March 2015 economic and fiscal outlook.
Asked by: Baroness Lister of Burtersett (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what will be the net gain per pound of the increase in personal allowances announced in the Budget to a taxpayer in receipt of (1) universal credit, (2) other means-tested benefits, and (3) no means-tested benefits.
Answered by Lord Deighton
As a result of increases to the personal allowance, a typical basic rate taxpayer will be £905 a year better off in 2017-18 compared with 2010-11, in cash terms. A basic rate taxpayer who also receives universal credit will still be better off from the personal allowance increase, as will a taxpayer who receives other means-tested benefits.
Universal Credit will improve work incentives by allowing people to keep more of their income as they move into work. Universal Credit will provide a single deduction rate of 65 per cent: for each £1 increase in post-tax income, 65 pence of Universal Credit will be withdrawn.
The Government believes that increasing the personal allowance is the most effective way to support those on low and middle incomes. It enables people to keep more of the money they earn.