Further to my post on Saturday, some further research has been published showing what the abolition of the 10p tax band actually means to millions of ordinary people. The Treasury has confirmed that 5.3 million families will lose out in total – even when the changes to tax credits are taken into account, meaning one in every five families will be worse off.
But who are these people and how much will they lose out by? The largest group who will lose out are the 2.2 million single working people with no children who are not getting the working tax credit, because they earn more than £12,500 but less than £18,000, or because they work fewer than 30 hours. They lose about £300 per year on average per family. Other losers include the 1.2 million two earner couples with no children, who may not qualify for the working tax credit, or they may fail to take it up, or because they both lose from the income tax and national insurance changes but there is only one gain from the tax credit which is assessed on the household; and 0.3 million women between the ages of 60 and 64 who do not get tax credits and are too young to be compensated by the rise in the pensioner tax allowance.
So much for these changes being introduced to help lower income groups. David Cameron has this morning promised to challenge the Government on this issue and try to persuade them to re-think this ludicrous policy. I am glad he is going to try but I doubt they will listen.