Chancellor announces new measures to benefit over 20 million UK taxpayers

Today, in a statement to the House of Commons, the Chancellor outlined the government’s proposals for providing financial assistance to those adversely affected by the removal of the 10 pence tax band.

All basic rate taxpayers up to the age of 65 will benefit from the measures announced today. The personal tax allowance has been raised by £600 to £6035 meaning that 22 million people on low and middle incomes will receive an additional £120 a year.

It will also mean that 4.2 million households out of the 5.3 million households will receive as much – or more than – they originally lost, with the remaining 1.1 million households seeing their loss at least halved. Eighty per cent of households are fully compensated with the remaining twenty per cent compensated by at least half. And in addition 600,000 people on low incomes will be taken out of tax altogether.

People aged between 60 and 64, whose average loss was £100 will also get the advantage of the increased personal allowance worth up to £120. They also receive the additional £50 Winter Fuel Payment for this year, which was announced in the Budget.

The increased personal allowance will apply to all income for this tax year and so will be backdated to 6 April. For future years the Government’s aim is to continue the same level of support for those on lower incomes. The Chancellor will bring forward proposals to do this at the Pre-Budget Report.

This measure represents the fairest and most effective way to help all those affected as a result of the changes proposed last year. In addition, this family tax cut provides support this year for those on middle incomes at a time where they face increased bills, so supporting the economy.

The Tories claim to care about people on low incomes. But they opposed every major measure the Government has introduced to help low income people. They opposed the introduction of the Minimum Wage. They opposed tax credits. They opposed more help for pensioners.

And their record in government speaks for itself. During the years of Tory rule, rates of child poverty tripled. Those living at the bottom of the income scale saw their real incomes stagnate. And all suffered as a result of 15% interest rates and 3 million unemployed.

For all their grandstanding on 10p, the Tories have refused to say what they would do, with David Cameron failing to give a straight answer three times in a row at his recent press conference. And they have changed position numerous times. They have failed to outline their policies to help those on low incomes. Behind Tories claims are the hard facts that they have refused to commit to eradicating child poverty and they have talked of dismantling tax credits. The Tories have no credibility when talking about helping people on low incomes.