House of Commons · Westminster Hall
12 May 2025 · 8 other contributors · 6,967 words
Opened by Lewis Atkinson Lab Sunderland Central
Responding minister: James Murray
Summarised by AI from the official record, so it can contain mistakes.
Lewis Atkinson raised concerns about income tax: personal allowance in Westminster Hall. A government minister responded.
Key points
Key requests to Government
The debate aims to discuss whether income tax personal allowances should rise and how such changes would be funded, considering their potential regressive impact on inequalities of income.
MPs spoke in turn to share their views and ask questions. Here's what each person said.
Opened the debate
The debate was triggered by over 250,000 citizens signing a petition regarding the Income Tax Personal Allowance. The context is that average disposable incomes after tax fell from 2019-20 to 2023-24, leaving people poorer at the end of the last Parliament than they were at the start.
Joined the debate underscoring the need for effective measures to address living standards and poverty, advocating for policies that would alleviate financial burdens on working families and pensioners.
Argued that the tax system may not be the best way to address unexpected financial shocks but acknowledged the importance of providing support.
Argues against increasing the personal allowance due to the high financial cost and questions Labour's ability to manage public finances responsibly.
Suggested a mechanism for offsetting unexpected bills faced by carers against tax liabilities.
Discussed the disparities in benefits from raising personal allowances for different income levels and geographical areas. He also mentioned the public sentiment on living standards and the need to manage public finances well. Notes that raising the personal allowance would cost around £50 billion to £65 billion. Discussed the impact of recent policies on pensioners receiving only the state pension. Reminds the House that there are personal stories behind signatories to the petition and emphasises the importance of economic policy debates.
Shared a personal anecdote of meeting a struggling family and emphasized the importance of supporting low-income earners by raising the personal allowance or scrapping unfair child benefit caps. He also called for action to reduce child poverty.
Paid tribute to his constituent Mr Alan Frost for raising the number of signatures required and questioned the impact of freezing the basic allowance at £12,570 on pensioners with limited income.
Expressed concern about the financial impact of pensioner tax thresholds and highlighted the importance of considering pension incomes and maintaining the triple lock, although not the subject of this debate.
Government Response
James MurrayThe Exchequer Secretary to the Treasury
Acknowledges the public interest in the topic and reiterates the Government’s commitment to keeping taxes low for working people and pensioners. Stresses the importance of fiscal responsibility, noting that raising the personal allowance to £20,000 would cost over £50 billion, potentially leading to economic chaos if abandoned.