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Cost of Living (Low Earners)

Volume 577: debated on Tuesday 11 March 2014

The Government are protecting the incomes of low-income households by freezing fuel duty and council tax and taking 2.7 million people out of tax by freezing the personal allowance. The best way to raise living standards is to stick to the Government’s long-term economic plan, which delivers for all. Britain is back on the path of prosperity: the economy is growing, the deficit is falling and jobs are being created.

Now that’s nonsense. How on earth can this Government—the lot of them—justify this, let alone lie straight in bed at night, when they have given the top 1% richest people in this country a £100,000 pay rise and at the same time they are impoverishing the real workers of the country—the postmen, the nurses, the teachers—by making them up to £2,000 a year worse off?

The hon. Gentleman should put an end to the petty party politics and focus on the facts. He talks about the richest 1%, but the richest 1% are paying almost 30% of total income tax, which is the highest share ever. The richest 5% are paying almost 50% of total income tax. The only way this country will recover from Labour’s great recession is if we stick to our long-term economic plan, which is delivering for all.

Is not creating more jobs the best way to help the lowest paid? Of the 200 businesses I have polled in my constituency, 83% say that they are optimistic about the future and want to expand to create more jobs. Would not the best way to help them be to lower their taxation so that they can create those job opportunities?

Of course my hon. Friend is right; the best way for anyone to raise their living standards is through having an economy that creates more paid employment. That is why we should welcome the fact that more than 1.3 million jobs have been added to our economy over the past four years.

The Minister is not having the best of days today, and I wonder whether I could help him by inviting him and the Chancellor to come to Coventry, where I could introduce him to many families in my constituency who are on very low wages and, despite both parents working, finding it very hard to make ends meet. Is he aware that the singular achievement of this Government, and this Treasury, has been to create a new social class—namely, the working poor?

The hon. Gentleman talks about people not having the best of days, but he should reflect on the policies of the Government he supported and on how many lives were destroyed by the great recession, which was the deepest in 100 years. The best way to raise living standards is to stick to our long-term economic plan. If we abandoned it, many more people would suffer.

A good way to help those on low incomes is to take less money from them in tax. Next month, the Liberal Democrat manifesto target of a £10,000 income tax threshold will be achieved. Will the Minister help the low paid further by increasing that threshold to £10,500?

This Government are proud that we have been able to cut taxes for the lowest paid in society. In fact, people working full time on the national minimum wage will have seen their income tax bill more than halved because of this Government, and I welcome my hon. Friend’s support for that policy.

Now we know that the Minister thinks there are no women in Britain good enough to be on the Monetary Policy Committee, let me ask him another question. The Chancellor’s Budgets and spending reviews have hit women, particularly those on low incomes, a staggering four times harder than they have hit men. Millions are struggling with the cost of living crisis, and people are on average £26 a week worse off since 2010, so why are the Chancellor’s top-rate tax cut and marriage tax break giving 80% of the benefit to men? Just take a look at the Government Benches. Are this Government completely out of touch with the women in this country?

Because of this Government’s economic plan to deal with the record budget deficit that the previous Government left behind, more women are employed in our economy than at any other time in history, and 1.4 million women have been taken out of income tax altogether because of our personal income tax allowance increases.