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Clause 2 - Personal allowance for 2013-14 for those born after 5 April 1948

Part of Finance (No. 2) Bill – in a Public Bill Committee at 4:15 pm on 23rd April 2013.

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Photo of David Gauke David Gauke The Exchequer Secretary 4:15 pm, 23rd April 2013

An important point was put very well by my hon. Friend the Member for Ipswich a moment or so ago. As it happens, we are likely to see an increase in disposable income. According to the OBR, there was an increase in 2012 and we will see that accelerating as we go through this Parliament, but there are undoubtedly significant cost of living pressures, and we are trying to take steps to redress them. That is why there is a freeze in council tax, which the hon. Member for Edinburgh East does not support, but which we think does help a number of people. We are seeing a freeze in fuel duty, which means that it is 13p per litre lower than it would otherwise be.

I will not deny that we have had to take some difficult decisions when it comes to the public finances. We have put up VAT, and we have had to make some difficult decisions when it comes to public spending and benefits—[Interruption.] And tax credits. If we are serious about getting the deficit down as a responsible Government,  we have to make some of those decisions. We would not be being straight with the British people if we said, “Oh, no, we can do all of this. We can spend extra money here and cut this tax here and we don’t have to increase that tax there.” That seems to be the prospectus that we have heard from the Opposition. It is not being straight with the British people to complain about the deficit, but then oppose every single measure that we put forward in an attempt to deal with it.