Indeed, people who are working and who are, or were, paying tax stand to lose considerable amounts, particularly in the light of the way in which the tax credit system has been eroded as part of this process.
There are those who say—again, this is one of those things that keeps getting repeated as if it were true—that the Labour Government were not bothered about getting people into work or making work pay, but the whole thrust of tax credits, including child care tax credits, was indeed to make work pay. What this Government have done, by reducing the amount that can be claimed for child care, by taking away tax credits and, most inappropriately in my opinion, by taking away tax credits from some of the lowest-paid couples because they are deemed not to be working enough hours, more than detracts from the gains made by raising the tax threshold. Being realistic, these poor people whom the Liberal Democrats think they are standing up for have, particularly if they have children, lost out because of the combined effect of the Government’s measures.
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I do not think there is any proof for the idea that if we lower tax rates, people will somehow invest. Let us look at what the Office for Budget Responsibility said about investment. It is predicting that the amount of investment going into business in the coming years will be much less than was previously thought. Despite what Government Members believe, if the people apparently
not even paying this tax are not investing in the economy, is it clear where they are putting their money? Yes, they are clearly putting it into very expensive properties, but that does nothing to improve job prospects for young people.