Local MP challenges government on higher taxes for poorest people

2.18.41pm BST (GMT +0100) Mon 21st Apr 2008

27,000 Stockport residents may be paying higher income tax after the abolition of the 10p rate by the government, it has been revealed.

On April 6 the government abolished the lower rate in order to pay for a 2p cut on the basic rate of income tax from 22p to 20p. It will allegedly leave 5.3 million people in the UK paying higher taxes; including many pensioners aged 60 to 64.

Now Hazel Grove MP Andrew Stunell is challenging the government on raising the tax burden on the poorest people.

Commenting on the tax changes, Mr Stunell said "It's unbelievable that the government is raising taxes on the poorest people just when they are receiving their bills for Council Tax. People with more money are now paying less tax.

"As a single person you have to be earning as much as £18,500 a year to be better off, and that means that the poorest people, especially older people who are struggling with fuel bills over the winter, will be told to pay higher taxes that they cannot afford.

"It's time for the government to look at the tax system again, realise that the 2p cut is not going to help the most vulnerable people, and start reducing taxes for those least able to pay".

ENDS

Notes to editors:

Andrew has signed the following EDM (No. 1073):

That this House expresses its concern that the abolition of the 10 per cent. tax band introduced in the 2007 Budget will have a detrimental impact on a number of low income groups, particularly pensioners aged between 60 and 64 years; notes that those who have retired on medical grounds under 60 years will suffer disproportionately as they will only have accrued small pensions; further notes that women are disproportionately affected by these changes and that 0.6 million women aged between 60 and 64 years will see their income decreased by £1.95 a week on average; and calls on the Government to take the needs of this small, low-income group into account in the forthcoming Budget.

2. On 6th April, Labour doubled the starting rate of income tax from 10p to 20p in the pound. Previously, a 10p rate was paid on the first £2230 of taxable income. As a result, instead of taking £223 in income tax on this portion of people's wages, Gordon Brown's government is taking £446.

3. Though the standard rate of income tax has been cut from 22p to 20p in the pound, a single person with no children would have to be earning over £18,500 to be better off under the tax changes.

4. People taking early retirement with a taxable income of less than £8,000 will lose, by up to £232 a year.

5. A single person with no children earning less than £18,500 will be a net loser, by up to £232 a year.

6. Liberal Democrat plans to cut the tax burden for those on low income include scrapping council tax and replacing it with a local tax based on ability to pay, and cutting the standard rate of national income tax by 4p in the pound, paid for by closing tax loopholes used by the wealthy and by increasing green taxes, such as the duties paid by the most polluting vehicles and those who travel in the most polluting aircraft.