Clause 24 - Personal allowances for those aged 65 or more

Finance Bill – in a Public Bill Committee at 10:15 am on 11th May 2004.

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Question proposed, That the clause stand part of the Bill.

Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary To the Treasury, Economic Affairs, Shadow Chief Secretary to the Treasury

The clause serves to increase age-related personal allowances by 3.3 per cent., together with related income limits. Why has there been special treatment for this category of people, when the basic personal allowances—the age-related allowance for married couples and the blind persons allowance—have all been based on RPIX at 2.8 per cent.? What is the logic for having 3.3 per cent. for one group, while others, which are apparently equally worthy, have only 2.8 per cent.?

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

This is to be consistent with the Government's promises elsewhere on average earnings. The Government increased the guaranteed element of the pension credit by using the July average earnings seasonally adjusted headline rate, and promised to continue to do that for the remainder of the Parliament. Accordingly, we have used the July average earnings measure this year, as in previous years, because of clear commitments that the Government made in this area.

Question put and agreed to.

Clause 24 ordered to stand part of the Bill.