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Benefit Reform

As the hon. Gentleman will know, the minimum wage is established by the Low Pay Commission, which considers every year how the national minimum wage can be increased. The national minimum wage has been an important part of ensuring that people are better off in work. As a result of the changes to things such as the tax credits, we have, over the past 10 to 12 years, reduced the number of people facing the very highest marginal deduction rates, which occurs when there are complex interactions between different benefits. That is also one reason why we think that the long-term approach will include measures such as simplifying housing benefit and considering how to apply it better in future, for example through a housing tax credit or different approaches to a single working age benefit. A further impact of that is ensuring not only that people are better off, but that they get continued support. If all support was immediately withdrawn once people moved into work, although they would be able to work more hours and see their income increase with every hour that they worked, they might lose the substantial additional support that we think it is right to give to people on low incomes. Such people, especially those with families, should have additional support, and there should also be extra support for their children. The issue is important, but we have done a lot to reduce the number of people facing the highest marginal deduction rates. The long-term approach to the issue should be through such measures as major benefit and tax reform.