The below Parliamentary question was asked by Ian Murray on 2015-10-09.
To ask Mr Chancellor of the Exchequer, for what reasons his Department has not undertaken and published an impact assessment for the Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015.
Damian Hinds
The Summer Budget offered a new deal for working people. It means Britain moving from a high welfare, high tax, low wage economy to a lower welfare, lower tax, higher wage society.
A new National Living Wage for workers aged 25 and above, initially set at £7.20 per hour from April 2016, will directly benefit 2.7 million low wage workers, and up to 6 million could see a pay rise as a result of a ripple effect up the earnings distribution. The new National Living Wage will boost pay for those currently earning the National Minimum Wage by £4,800 a year by 2020 when the National Living Wage is expected to rise to over £9 per hour.
To help working families keep more of what they earn, the personal allowance will increase to £11,000 in 2016-17 and £11,200 in 2017-18. The government has committed to increase the personal allowance to £12,500 by 2020 which will mean that a typical basic rate taxpayer will see their income tax cut by £1,205 a year compared to 2010.
The government set out its assessment of the impacts of the Summer Budget policies in the Welfare Reform and Work Bill on 20th July 2015. Taken together, the introduction of the National Living Wage, increases in the personal allowance and welfare changes mean that 8 out of 10 working households will be better off as a result of the Summer Budget.
In response to a request from the Secondary Legislation Scrutiny Committee, the government has chosen to produce and release an impact assessment on the tax credit changes to the Committee. The impact assessment shows that 60% of the tax credit savings come from the half of tax credit claimants with the highest income.