Jonathan Ashworth – 2015 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Jonathan Ashworth on 2015-10-28.

To ask Mr Chancellor of the Exchequer, with reference to his Department’s impact assessment on the Tax Credits (Income Threshold and Determination of Rates) (Amendment) Regulations 2015, what the (a) income brackets are for each decile and (b) equivalent levels are for the proportions in Chart 1.

Damian Hinds

The analysis that fed into the published Impact Assessment^[1] shows how the £4.4bn of savings from the tax credit changes as laid out in the publication are distributed for each income decile on the income distribution for tax credit claimants. This has clearly demonstrated that tax credit claimants on the highest incomes – on average £42,000 a year – will contribute nearly 4 times as much as the claimants on the lowest incomes to the savings from this policy.

This Government is committed to moving from a high welfare, high tax, low wage economy to a lower welfare, lower tax, higher wage society. As the Chancellor has made clear, the Government will set out at Autumn Statement how we plan to achieve the same goal of reforming tax credits, saving the money we need to save to secure our economy, while at the same time helping in the transition.

[1] http://www.parliament.uk/documents/lords-committees/Secondary-Legislation-Scrutiny-Committee/DraftTaxCreditsRegs2015-ImpactAssessment.pdf