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Poverty Trap

Volume 24: debated on Wednesday 26 May 1982

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asked the Chancellor of the Exchequer, pursuant to the reply of the Financial Secretary, 13 May, Official Report, c. 939, in what way the maintenance of the real value of the retirement pension and other benefits has worsened the poverty trap.

[pursuant to his reply, 24 May 1982, c. 225.]: The policies of successive Governments have tended to raise social security benefit levels relative to income tax thresholds. The aim has been to help poorer sections of the community while financing public expenditure without excessive borrowing. As a result the poverty trap has tended to be made worse by widening the range of income over which tax and national insurance contributions are paid by those in work, at the same time as the value of State benefits are received.