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Cost of Living

Volume 555: debated on Tuesday 11 December 2012

The Government continue to take steps to support households. We will increase the personal allowance further to £9,440 in April 2013 to support hard-working individuals. That cash increase of £1,335 in 2013-14 is the largest ever. We have also cancelled the 3p fuel duty increase that was planned for January, and announced a third council tax freeze and a two-year reduction in the cap on rail fares.

I just want to make sure that I have got my figures right. Am I correct in thinking that under the Labour Government fuel duty rose by 20p, and that had they remained in power, they would have planned for it to rise by 13p more than it will rise under this Government?

As usual, my hon. Friend has his facts absolutely right. The action taken on fuel duty by this Government means that in April next year, pump prices will be approximately 13p a litre lower than they would have been had the last Government remained in office.

I welcome the announcements in the autumn statement, particularly the announcement of an increase in the personal allowance, which will take 2.6 million people in the north-west of England out of income tax altogether. Will my right hon. Friend reassure us that he will continue to raise the allowance to ensure that it always pays to work?

Ensuring, through increases in the personal allowance, that low and middle-income workers in particular can keep more of the money that they earn rather than handing it over to the Exchequer helps those people to deal with pressures related to the cost of living. I can certainly assure my hon. Friend that I will continue to push that policy, along with my Liberal Democrat and Conservative colleagues. At the time of the last general election I made a key promise to lift the income tax threshold to £10,000, and I intend to deliver that promise as soon as possible. [Hon. Members:“ Like the promise about tuition fees?”]

Order. Labour Members are shouting their heads off, and the hon. Gentleman cannot be heard. Let us hear from Mr Davies.

The incomes of the top 10% in Britain have risen by 11% in the last two years, but we heard in the autumn statement that they would be cut by only 0.5%. Does Chief Secretary not agree that those people are in a fantastic position to take on increases in the cost of living, unlike the poorest 40%, who are being unnecessarily smashed by this Government?

The hon. Gentleman should recognise that the top 10% make up the part of the population that is contributing most to dealing with the financial problems caused by the Labour party—the mess that we are trying to clean up—both in cash terms and in terms of a share of their incomes. He should welcome the fact that this Government are doing more than any previous Government to ensure that the wealthiest in society contribute most to sorting out the financial problems that he and his colleagues created.

In the interests of transparency, will the Chief Secretary and his colleagues make public an impact assessment relating to child poverty before the welfare uprating Bill is laid before Parliament, not least because it would help us to understand the impacts of the cost of living and benefit freezes on low-paid working families?

The Department for Work and Pensions will, of course, publish an impact assessment in the normal way when the Bill is published.

The most significant way in which any Government can help people with their household budgets is to put more money in their pockets and purses, particularly money that they have earned themselves and which is subject to taxation. Does the Chief Secretary agree that one of the most important things that the coalition Government will do is lift millions of people out of income tax altogether, and, by April next year, deliver a broad income tax cut of £600 a year in relation to the level in April 2010?

Like my hon. Friend, I want to build a strong economy and a fair society where everyone has a chance to get on in life. The commitment to raise the income tax threshold was a commitment that he and I and all our colleagues made at the general election, and we are delivering on it in Government. There is a tax cut for working people cumulatively over this Parliament, and next year it will be worth £50 a month to people on low and middle incomes. That is real help for hard-working families at what is a difficult time.

Average wages in Scotland have fallen by 7.4% under this Chief Secretary, and from next year 182,000 couple-families in work with children will stand to lose money through tax credits. Why are this Government always standing up for millionaires while hammering the strivers?

I will not take any lectures on millionaires from the Labour party, which thought it appropriate that a millionaire private equity fund manager should pay less on his income than the person who cleans his office. Labour’s record on taxing the wealthy, dealing with tax avoidance and closing tax loopholes is nothing to be proud of, and the hon. Gentleman should stop raising that point.