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Welfare Reform on the Web (May 2008): Social security - UK

10p tax deal 'helps only one in five'

J. Kirkup

Daily Telegraph, Apr. 25th 2008, p. 4

An estimated 5.3 million people on low incomes have been made poorer by the abolition of the 10p income tax band. In the face of a threatened revolt by 50 Labour MPs who were proposing an amendment to the Finance Act, the government climbed down and offered a series of concessions to those worst affected. However, the Social Market Foundation think tank has said that because the government is only willing to spend around 1bn on the package, most losers would not be compensated.

The best start in life? Alleviating deprivation, improving social mobility and eradicating child poverty

Work and Pensions Committee

London: TSO, 2008 (House of Commons papers session 2007-08; HC 42)

The Government has set itself the challenging target of halving the number of children living in poverty by 2010-11 and eradicating child poverty by 2020. With 2010 fast approaching, Ministers are still committed to the targets - as they reaffirmed in the Comprehensive Spending Review (CSR), in speeches and in evidence to this inquiry. The Committee wanted to ascertain whether DWP has the right measures in place to meet its objectives. The report makes a number of recommendations as to ways in which a package of support and investment could be provided. It addresses issues of childcare, disability and back to work programmes. Getting parents into sustainable work should be the focus of the strategy to lift them and their children out of poverty. The committee is, however, concerned that the Jobseekers' Allowance regime is not sufficiently flexible to reflect the complexity of lone parents' lives, particularly parents of disabled children, and that the sanctions regime as proposed is not in the best interest of children. Ensuring that people are better off in work than out of work will improve work incentives, help the Government to meet its 80% employment target and contribute to lifting families out of poverty. However, the Government needs a long-term strategy on benefit income for those who are unable to work. If benefits are uprated in line with inflation, the gap between the incomes of those in work and those on benefits will only get wider, as benefits will not keep pace with earnings. As poverty is measured as a percentage of median earnings, the implications for the 2020 target, in particular, are serious.

Brown Wednesday: the humbling of a prime minister

P. Webster

The Times, Apr. 24 2008, p. 1

Labour Party rebels have claimed victory after the Prime Minister agreed to compensate people on low incomes made worse off by the abolition of the 10p income tax band. The package of remedial measures, however, remains unclear.

(See also The Guardian, Apr. 24th 2008, p. 4; Independent, Apr. 24th 2008, p.4)

Government fails to quell furore over 10p tax rate

A. Grice

The Independent, Apr. 25th 2008, p. 11

The Government's compensation scheme for people hit by the abolition of the 10p tax rate is already unravelling, according to the Conservatives. The Tories went on the attack after details of the package fell short of the Labour compensation pledge.

(See also The Times, Apr. 25th 2008, p.26; The Guardian, Apr. 25th 2008, p. 13)

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