Earnings/Inflation

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 5th November 2013.

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Photo of Julie Hilling Julie Hilling Opposition Whip (Commons) 11:30 am, 5th November 2013

What recent assessment he has made of the rate of increase in (a) average earnings and (b) consumer price inflation.

Photo of David Gauke David Gauke The Exchequer Secretary

Disposable income increased last year at the fastest pace since 2009. In March, the Office for Budget Responsibility forecast that real household disposable income growth would accelerate each year from 2014 to 2017, reaching 2.3% in 2017. The best way to raise living standards is to stick to the Government’s economic plan and deliver a recovery that works for all. Britain is back on the path to prosperity, the economy is growing, the deficit is falling and jobs are being created.

Photo of Julie Hilling Julie Hilling Opposition Whip (Commons)

I do not understand how the Minister and the Chancellor can think that their economic policies are a success. After three wasted and damaging years of flatlining, working people are on average £1,500 a year worse off. Is it not clear that his plan has failed hard-working families?

Photo of David Gauke David Gauke The Exchequer Secretary

It has not failed the people of Bolton West, where unemployment has fallen by 1,800 in the past year.

Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire

On the subject of the cost of living, does my hon. Friend think it astonishing that Opposition Members do not understand that this Government have done so much to keep council taxes down? If we were still subject to their policies, the average council tax cost would be £210 a year higher.

Photo of David Gauke David Gauke The Exchequer Secretary

My hon. Friend is absolutely right. It was not this Government who doubled the rate of council tax, it was not this Government who doubled the rate of income tax for the lowest earners and it was not this Government who increased fuel duty 12 times.

Photo of Andrew Gwynne Andrew Gwynne Shadow Minister (Health)

Why does the Minister think that April 2013 was the only month on this Chancellor’s watch in which pay rose faster than prices? Does he agree with the ONS that it is because people deferred their bonus payments to make the best use of the Chancellor’s millionaires’ tax cut?

Photo of David Gauke David Gauke The Exchequer Secretary

Of course, under the previous Labour Government bonuses were four times the rate they were this year. I would also ask the hon. Gentleman whether Labour believes in reversing the 45p rate of income tax, because I am not sure what the answer is.

Photo of Stephen Metcalfe Stephen Metcalfe Conservative, South Basildon and East Thurrock

Does my hon. Friend agree that one way of tackling rising prices is to leave people with more of their own money in their pocket? Will he confirm that the 50% tax cut we have given to those on the minimum wage has done exactly that and shows that we are on the side of hard-working people?

Photo of David Gauke David Gauke The Exchequer Secretary

My hon. Friend is absolutely right. If we want to help living standards, we want to be able to cut taxes in a sustainable way. That is what we are managing to do.