Question
To ask the Chancellor of the Exchequer, with reference to the oral contributions of the Chief Secretary to the Treasury of 22 November 2023, Official Report, column 360, and 30 November 2023, Official Report, column 1087, what calculations his Department has used to estimate that taxes for the average worker will have reduced by £1,000 since 2010.
Answer
Thanks to the cut to employee National Insurance contributions (NICs) announced at the Autumn Statement and to above-inflation increases to starting thresholds since 2010, an average worker in 24-25 will pay over £1,000 less in personal taxes than they otherwise would have done.
The calculations underlying this statistic are based on public information, including a published estimate of average earnings. They are robust and could be replicated by an external analyst.
The calculations are on a same-year basis against a counterfactual, to isolate the effect of policy changes on tax liabilities. Comparisons over time would include the effects of earnings growth on cash totals of tax due, given the progressive personal tax system. It is straightforward to calculate how much the average worker paid in personal taxes in each financial year since 2010-11 using published information.