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Poverty

Volume 495: debated on Monday 29 June 2009

To ask the Chancellor of the Exchequer with reference to the answer to the hon. Member for Dundee, West of 16 April 2007, Official Report, column 422W, on working tax credit, what the evidential basis was for the statement that it is those aged 25 years or over who are most likely to face poorer incentives to work or suffer persistent poverty in work. (282640)

Analysis has shown that introduction of the working tax credit halted a sharp fall in the employment rate of people without children at age 25. This analysis was published in March 2008 in “Working Tax Credit and Labour Supply: Treasury Economic Working Paper No. 3”, available online at:

http://www.hm-treasury.gov.uk/d/bud08_workingpaper3_455.pdf

The Labour Force Survey, conducted by the Office for National Statistics, also shows that while working people experience substantial wage growth up to around age 25, wage growth for those aged 25 and over is much slower. Someone who is still on a low income by the age of 25 or over is therefore more likely to experience persistent poverty.