Clause 3
Finance Bill
11:45 am
David Gauke (Shadow Minister, Treasury; South West Hertfordshire, Conservative)
On clause 3, I note the increases in personal allowances. The Minister has stated that he also acknowledges that this does not succeed in compensating a number of those who have lost out as a consequence of the 10p rate being abolished. I am sure that point has been noted by his own Back Benchers.
On new clause 2, the Minister said that he could see difficulties in an increase in personal allowances being for one year only. I note that comment. As I have made clear, this policy is for this year and personal allowances would need to be looked at again next year were we in a position to control what those allowances might be and consider the appropriate approach. I was rather struck by the irony that a Minister was querying whether it was appropriate to use the personal allowance on a temporary basis to address a particular problem. Those of us who recall last year’s debates will know that the Government did precisely that with a temporary increase in personal allowances to address the 10p rates, which they made permanent in the PBR. Certainly the intention this time last year—it was almost to the day that the compensation package was announced—was that it was on a temporary basis. I am not sure that the Government are on the strongest ground here.
As the Minister stated, the intention of new clause 2 is to raise the personal allowances for those over 65 and those over 75 by an additional £2,000 a year.