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Low-income Households

Volume 475: debated on Wednesday 7 May 2008

7. Whether the social exclusion unit has undertaken research on the effect of the tax system on low-income households. (203761)

Analysis from the independent Institute for Fiscal Studies shows that tax and benefit reforms introduced since 1997 have increased the annual incomes of the poorest tenth of the population by 12.4 per cent. or £1,300 on average. In addition, independent research confirms that tax credit and other measures have helped lift 600,000 children out of poverty during that period.

Given the specific remit of the social exclusion unit, will the Minister state whether, prior to the last Budget, the unit provided any advice to Ministers on the entirely predictable negative consequences to people on low incomes of the abolition of the 10p tax band? If so, why was that advice ignored?

We have discussions about a range of issues with all kinds of colleagues across Government. Nobody in the House is proposing that we restore the 10p tax rate. The Opposition had to admit that yesterday. I come back to what I said in my earlier answer: we take credit for the fact that we have taken 600,000 children out of poverty—a record that the Conservative party could never match.