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.

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a single deduction rate of 65 per cent: for each £1 increase in post-tax income, 65 pence of Universal Credit will be withdrawn.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.