Since 2010, the Government have increased the income tax personal allowance by more than 50% and it will reach £10,000 this April. That will cut the income tax bills of more than 25 million working people by £700 a year. We can afford to do that because we have stuck to a credible economic plan that is creating jobs and supporting growth, as is shown by today’s excellent figures.
That means that 2.4 million people have been lifted out of paying tax altogether. In my constituency, thousands of people are no longer paying tax and are in profitable work. My constituency has a 1.9% unemployment rate and thousands of jobs are coming to Daventry. Does that not show that for my constituents, the Government’s long-term economic plan is working?
I would prefer it if those resources were used to fund further increases in the personal allowance. However, the hon. Gentleman should welcome the fact that the Government are saving thousands of people in his constituency £700 a year in income tax that they would be paying if his party had stayed in office.
Raising the income tax threshold to £10,000 is putting more money into the pockets of the low-paid, and their spending is helping to drive the recovery. Will the Chief Secretary consider increasing the threshold to £10,500 in the forthcoming Budget?
My hon. Friend is right to say that this policy is helping people on low incomes, as well as working people up and down the country, many of whom have household budgets that are under pressure. I would like the income tax personal allowance to be higher. As a party, we have set the goal of a £12,500 personal allowance in the next Parliament. In the same way, the £10,000 goal for this Parliament was set by the Liberal Democrats.
I note that, despite a number of opportunities, the Chancellor did not mention the cut to the 50p rate of tax. I wonder whether the Chief Secretary to the Treasury will refer to it in answering a simple question. Will he confirm that people who are earning more than £1 million have received an average income tax cut of more than £100,000 this year—yes or no?
The figures from HMRC show that the cost of reducing the 50p rate to 45p was about £100 million. It is precisely because the tax was not raising any money that I was willing to support the decision to reduce it, on the basis that we would raise much more money from the same people in different ways. The House might like to be updated on one of those measures. The annual tax on enveloped dwellings—the mansion tax for tax dodgers—is raising five times as much as we thought it would.