Living Wage

HM Treasury written question – answered on 2nd December 2015.

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Photo of Baroness Lister of Burtersett Baroness Lister of Burtersett Labour

To ask Her Majesty’s Government what assessment they have made of the additional anticipated receipts for HM Treasury as a result of the implementation of the National Living Wage in each year from 2016 to 2020.

Photo of Lord O'Neill of Gatley Lord O'Neill of Gatley The Commercial Secretary to the Treasury

As set out in Table B.3 of their July 2015 Economic and Fiscal Outlook, the Office for Budgetary Responsibility estimate that, in 2016-17, the National Living Wage will leave receipts broadly unchanged. In 2017-18 and 2018-19, income tax and National Insurance Contributions (NICs) receipts are projected to stay constant but the overall impact of the policy on the public finances is forecast to reduce public sector net borrowing by £0.1bn. In 2019-0 and 2020-21, the policy is expected to increase income tax and NICs receipts by £0.1bn and reduce public sector net borrowing by £0.2bn.

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