Oral question asked in the House of Commons, by David Leslie Taylor (Labour). It was answered on Thursday, 12 July 2007 on behalf of the Treasury.

Tax Credits

Question: The Institute for Fiscal Studies is hardly a cheerleader for our party, but its assessment of the Budget in this regard is broadly very positive indeed. The IFS indicated that of the 10 deciles of income where it had assessed the impact the lowest two had benefited most from the changes. However, will the Chancellor respond to the IFS’s one observation of concern, which is that those who lost out due to the changes were disproportionately low-earning, single people, with no dependent children? Will he promote take-up—

Answer: I agree with the point that my hon. Friend made in relation to the IFS, which was extremely complimentary about the budget changes; but of course, I recognise what he said. The former Chancellor increased the threshold for working tax credit. He increased the child tax credit itself, which will help us to take 200,000 children out of poverty. We increased the age allowance, so low-income pensioners over the age of 65 will be no worse off and 580,000 will be removed from tax altogether. As my hon. Friend has said, the IFS showed that the biggest proportion of gainers are those at the lower end of the income distribution, which stands in stark contradiction to what the Liberals are proposing today.

Secondary information

Type: Oral question
Reference: 462 c1604
Session: 2006-07
Oral question type: Supplementary
Chamber / Committee: House of Commons chamber
Subjects: Children Pensioners Low incomes Social security Welfare tax credits Single people Eligibility Income tax Tax rates and bands Take-up
Contains statistics: Yes
Link: View this Oral question on www.publications.parliament.uk