Higher tax allowance of limited help to lowest paid families
Responding today to the Deputy Prime Minister Nick Clegg’s speech to the Lib Dem Conference, Chief Executive of Child Poverty Action Group Alison Garnham said:
“It was good to hear the Deputy Prime Minister emphasising how parents in working poverty are bearing the brunt of spending cuts. We should be moving heaven and earth to help the nearly two thirds of poor children living in working families, not condemning more children to join them.
“But let’s be absolutely clear, if you want to invest money to help working parents, then raising the personal tax threshold is a poorly targeted and expensive way of doing that. You could do a lot more at far less cost by improving help through tax credits and Universal Credit.
“As little as 15% of the billions needed to raise the tax threshold to £12,500 would go to working families in the lowest-income half of the population1. Many are simply paid too little to benefit from a higher tax allowance while, for those who do earn a bit more, a lot of the gain is cancelled out by benefit rules which claw back benefits as incomes rise.”
Notes to Editors
- CPAG is the leading charity campaigning for the abolition of child poverty in the UK and for a better deal for low-income families and children.
- CPAG is the host organisation for the Campaign to End Child Poverty coalition, which has members from across civil society including children’s charities, faith groups, unions and other civic sector organisation, united in their campaigning for public and political commitment to ensure the goal of ending child poverty by 2020 is met.
For further information please contact:
CPAG Press and Campaigns Officer
Tel. 020 7812 5216 or 07816 909302
- 1. For IFS analysis on increasing the personal tax allowance to £12500, please see page 155 of http://www.ifs.org.uk/budgets/gb2014/gb2014_ch7.pdf