Finance Bill

Government new clauses 11 and 12 and Government amendment No. 5 put into effect the Chancellor's statement to the House on 13 May. Raising the personal allowance by £600 to £6,035 is worth £120 for a basic rate taxpayer, equivalent to the average household loss from the Budget 2007 reforms. Around 2 million basic rate taxpayers will benefit from the change. The number of households that lose from the Budget 2007 reforms will be reduced from 5.3 million to 1.1 million, and the amounts for those who still see a loss will be at least halved. The Treasury Select Committee published its report on Saturday 28 June. We will respond in detail to that report in due course, but let me just quote from the Committee's press release. The Committee welcomed the compensation for"““those who have lost out through the abolition of the starting rate of income tax through raising the personal allowance for basic rate taxpayers, but concludes that there remains a pressing need for the Government to seriously examine ways in which the 1.1 million households who will continue to lose can be fully compensated.””" As I have the opportunity of speaking twice on such occasions, it has been my practice in Committee to move the Government's amendment or new clause briefly and then listen to the detail of the debate, so that I may address directly the points that colleagues raise.