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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 3:15 pm on 23rd April 2013.

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Photo of John Cryer John Cryer Labour, Leyton and Wanstead 3:15 pm, 23rd April 2013

When we were in government and the Conservatives were in opposition, I remember amendments being tabled in Committee after Committee calling for reviews, reports and submissions. Such amendments would call specifically for reviews to be established under primary legislation. I am sure that there are some Conservative Members who will admit to tabling such amendments. I do not know about the Liberal Democrats but, from what I remember, they were even worse at it. They were always banging down amendments calling for reviews; at one point, they actually asked for a review of all the reviews that were going on.

My hon. Friend the Member for Gateshead—for the benefit of the hon. Member for Ipswich, Gateshead is a town in the north-east of England with a manufacturing background; it is part of that large blob above Watford gap of which he is vaguely aware—asked what all the suffering was for. Well, not very much, as far as I can see. The main purpose—apart from all the other ones—that springs to mind is the loss of our triple A credit rating from not just one but two of the agencies.

For years, the Chancellor and his Treasury Ministers told us how important that triple A rating was. We were told it was the thing that mattered above all else, because it meant that interest rates would remain low and we would retain stability and credibility on the international markets. Now, however, it has gone, and the Chancellor is telling us that it did not matter anyway. Either he was wrong before or he is wrong now—or at least he is being slightly misleading.

The purpose behind amendment 7 is clear. People who turned 65 on or after 6 April will not receive any age-related allowances—they will go. The age-related allowance will gradually wither on the vine for the over-65s, and then for the over-75s as well. To back that up, the National Pensioners Convention, with which I deal extensively, states in its briefing on the March 2013 Budget:

“the Chancellor has stuck to his plans to freeze the age related personal tax allowances for someone aged 65 to 74…and for someone aged 75…until they align with the ordinary personal allowance. On current trends, this is likely to be around 2015.Therefater, the allowances will rise in line with CPI.”

I will be grateful if a Government Member will confirm that the allowances will be in line by 2015 and that the overall loss to pensioners will be in the region of £3 billion. We are talking about a £3 billion raid on pensions over the next two years.