Oral Answers to Questions

John Stevenson Excerpts

Tuesday 11th September 2012 Commons Chamber

[Sajid Javid]

The Government’s policies, including those of the Treasury, are helping women. The change I mentioned previously—to the personal tax credits—will take 1.1 million people out of income taxation altogether, which will disproportionately benefit women.

[John Stevenson (Carlisle) (Con)]

14. What assessment he has made of the effect on the cost of living of the increase in the personal allowance.

[The Chief Secretary to the Treasury (Danny Alexander)]

In this year’s Budget, we announced a £1,100 increase in the personal allowance for 2013-14—the largest ever cash increase. The combined increases that the coalition has announced will reduce the tax paid by a typical basic rate taxpayer next year by £350 in real terms and £546 in cash terms.

[John Stevenson]

Given that the policy of significantly increasing the personal allowance has been hugely successful, would the Chief Secretary agree that the long-term goal should be to link the personal allowance with the minimum wage, thereby ensuring that anybody on the minimum wage does not pay income tax?

[Danny Alexander]

I am grateful for my hon. Friend’s endorsement of the policy. The coalition Government have committed to increasing the personal allowance to £10,000—a policy that was on the front page of the Liberal Democrat election manifesto—but I agree that the long-term objective, which I and my party share, should be to link the personal allowance to the minimum wage. However, a considerable cost would be attached to that.