Commons Sense

House of Commons · Ministers' Questions

Tax Policies: Impact on Living Standards

Tuesday 19 March 2024 · 9 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 5 Not answered 0

Key points

  • Rachel Hopkins asked about the impact of tax policies on living standards, to which the Minister responded with details on national insurance cuts and above-inflation increases to thresholds since 2010.
  • Paul Blomfield questioned the Minister on the OBR's assessment of the Government's threshold changes and NICs, to which the Minister responded by emphasizing the Government's commitment to supporting the most vulnerable.
  • Dan Carden stated that the OBR concluded this Parliament would be the worst on record for living standards, to which the Minister disagreed, highlighting the difficult global circumstances and the growth in the economy since 2010.

Topics (select to filter)

Questions & Answers

Q1 Rachel Hopkins Lab Luton South and South Bedfordshire
Taxation
Context

The MP noted recent assessments suggesting that the government's tax policies could negatively impact living standards.

Question

What recent assessment has been made of the potential impact of your tax policies on living standards?

Answer from Nigel Huddleston

Thanks to the combined impact of national insurance cuts and above-inflation increases to thresholds since 2010, an average worker on £35,400 in 2024-25 will pay over £1,500 less in personal taxes than they otherwise would have done. These national insurance contribution cuts were possible due to the significant progress we have made in combating inflation.

Partly answered

Not addressed: Did not provide a comprehensive assessment of living standards impact; focused on tax savings without addressing potential negative impacts.

How: Focused On Positive Aspects

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Q2 Paul Blomfield Lab
Taxation
Context

The OBR concluded that for every 5p gain per year there is a 10p loss, particularly for those on lower wages.

Question

I heard what the Minister has to say but does he not recognise the OBR's assessment of the interplay between the Government's threshold changes and NICs? The OBR concludes that for every 5p gain per year there is a 10p loss, particularly for those on lower wages. Does he accept the OBR assessment?

Answer from Nigel Huddleston

I am sure that if the hon. Gentleman looks carefully, he will see that the Government have demonstrated their commitment to supporting the most vulnerable in society. He will also have heard my hon. Friend the Member for North East Bedfordshire (Richard Fuller) explain the circumstances as to why we have higher taxes than we would desire.

Not addressed: Did not address the OBR assessment, instead referred to a different MP's explanation of tax issues.

How: Changed Subject

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Q3 Dan Carden Lab Liverpool Walton
Economy
Context

The OBR concluded this will be the worst Parliament on record for living standards and the only one in which they have fallen.

Question

The OBR has said that this will be the worst Parliament on record for living standards and the only one in which they have fallen: people are poorer after 14 years of this Government. We do not need fiscal tweaks; this economy needs renewal. It needs to bring in investment on a major scale, and a new age of education, training and employment in the real economy. My constituents cannot afford to wait while the Tory party looks for its polling fortunes to change. Have we not now reached the point where the best thing for the economy is a general election?

Answer from Nigel Huddleston

I completely disagree with the hon. Gentleman's explanation. Not only will I repeat that our constituents completely understand the difficult global circumstances, with the pandemic and the cost of living challenges following the invasion of Ukraine, but I can say that we have grown faster since 2010 than many other major economies.

Not addressed: Did not address economic renewal; instead focused on past growth rates.

How: Changed Subject

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Q4 Rachel Hopkins Lab Luton South and South Bedfordshire
Economy Taxation
Context

The Minister claims that the economy has turned a corner, but households will be £870 worse off on average under the Conservatives tax plan.

Question

The Minister says that the economy has turned a corner, but households will be £870 worse off on average under the Conservatives tax plan, and they will also be seeing their costs up by £110 a week compared with before the last election. Is the Minister proud of his record?

Answer from Nigel Huddleston

We are immensely proud of our record since 2010: living standards have increased, and growth is now better than that of many other major economies. Our absolute commitment to protecting the most vulnerable in society was shown recently when we provided an average of £3,400 in cost of living support for each household.

Partly answered

Not addressed: Did not address the specific concern about households being worse off; focused on overall economic achievements and recent support measures.

How: Changed Subject

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Q5 Steve Double Con
Economy Taxation
Context

The Minister introduced a 4p cut in national insurance, impacting tax rates for workers.

Question

Will my hon. Friend confirm that, following the 4p cut in national insurance that the Chancellor has introduced, the tax take on workers will be the lowest it has been for 50 years? In St Austell and Newquay, two people in a household on average incomes will be paying £1,800 less this coming year than they did last year.

Answer from Nigel Huddleston

Yes, absolutely, my hon. Friend has pointed out an important point on how we have had a laser focus on reducing the personal tax rates. Furthermore, the measures announced in the autumn statement and in the spring Budget will significantly add to economic activity, contributing about 200,000 full-time equivalent jobs to the economy.

Partly answered

Not addressed: Did not confirm if tax take on workers is lowest since 1973; focused on job creation from recent measures.

How: Changed Subject

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Q6 Luke Evans Con Hinckley and Bosworth
Benefits & Welfare
Context

The Chancellor stuck with the triple lock last year, guaranteeing an increase of 10.1%. Pensioners can often struggle because they have a fixed income.

Question

Pensioners can often struggle because they have a fixed income, so I was pleased that the Chancellor stuck with the triple lock last year, guaranteeing an increase of 10.1%. Will the Minister explain how the 8.5% rise that people will be getting in a couple of weeks' time will make a difference to their living standards?

Answer from Nigel Huddleston

My hon. Friend makes an important point. It is the case that not only have the measures in the autumn statement and the spring Budget helped workers, but we have also focused on helping pensioners. Those on the new state pension will benefit to the tune of about £900 a year, which is significant.

Partly answered

Not addressed: Did not specifically address how 8.5% rise impacts living standards; mentioned other benefits for pensioners.

How: Changed Subject

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Q7 Jonathan Gullis
Economy Housing Transport
Context

Families have been supported by national insurance cuts and freezing of fuel duty. Stoke-on-Trent has received significant funding from the government.

Question

Families in Stoke-on-Trent North, Kidsgrove and Talke have been supported by this national insurance cut, which means that the average family will be £1,800 a year better off. The freezing of the fuel duty means that motorists will be able to get around without being unfairly charged at the pump. Money from this Government has enabled Stoke-on-Trent to cut bus fares by a third, so that people can travel around. We have had £56 million from the levelling-up fund and £17.6 million for the Kidsgrove town deal, which means that the sports centre will be refurbished and reopened, improving people's health chances.

Answer from Nigel Huddleston

I could not agree more with my hon. Friend. This is fantastic, and I think it is a recurring pattern, Mr Speaker. We have positivity, optimism, and confidence in the future of the UK economy from Conservative Members, but absolute negativity from Opposition Members, because they have no plan, they have no clue and they have no hope.

Not addressed: Did not acknowledge specific support or impacts; instead praised government and criticised opposition.

How: Changed Subject

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Q8 Darren Jones Lab Bristol North West
Economy Taxation
Context

The public feels worse off after 14 years of Conservative government, despite recent tax cuts.

Question

Why does the Treasury Minister think people feel worse off after 14 years of Conservative Government?

Answer from Nigel Huddleston

We are turning a corner and have made measures to put money back into people's pockets. Labour claimed on the one hand that it was supportive of tax cuts, but last week failed to support those tax cuts when it came to it in Parliament.

Partly answered

Not addressed: Did not directly address why people feel worse off or acknowledge specific economic policies affecting public perception.

How: Changed Subject To Labour'S Stance On Tax Cuts

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Q9 Darren Jones Lab Bristol North West
Economy Taxation Local Government
Context

The public feels worse off due to the freezing of tax thresholds, upcoming council tax increases for five years, and the disparity between taxes levied and returned by the government.

Question

The Minister did not answer the question about why the public feel worse off. We on the Labour side know why. He mentions tax cuts, but does not talk about the freezing of tax thresholds or upcoming council tax levies for five years. Why cannot he admit that, for every 10p extra in the pound taken from people since 2010, the Government are only now giving back just 5p?

Answer from Nigel Huddleston

The Labour Front Benchers are announcing fundamental changes to policy that they have not yet costed. They did not object, as far as I am aware, to any of the measures required to support households and businesses during the pandemic which necessitated increases in taxation. We are now reducing the level of taxation because we have turned a corner. They did not support that.

Not addressed: Did not address specific economic policies affecting public perception or provide concrete details about tax thresholds and council tax.

How: Changed Subject To Labour'S Policy Changes, Criticized Labour For Lack Of Action On Previous Measures

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