A speech I made in the States against an amendment laid by Deputy Roffey who wanted to reverse the decision to equalise personal allowances. The amendment lost.
Deputy Roffey has set out very clearly why he thinks the more elderly should have a higher allowance than those of working age and I have to say I have great sympathy with his argument. In fact, I was very much leaning to supporting it.
But I’m a bit surprised Deputy Roffey has chosen to lay this amendment given his position as Chair of the Panel that produced the In-Work Poverty Report which SMC published last week when surely it is the poorest in society that will suffer most from a drop in personal allowance. I know the report talks about various options, but clearly these have not been looked at by P&R yet and until they have it doesn’t seem to make sense in messing around with what has already been agreed.
I think it is also worth referring to the most recent Quarterly Population, Employment and Earnings Bulletin that was published a couple of weeks ago.
Median earnings as at 30th June 2017 were £31,906 which, compared with a year earlier, was 1.6% higher in nominal terms and 0.7% lower in real terms. So, we have almost stagnant earnings, but at the same time pensions have been rising. Indeed, they are due to go up by 2.8% under the annual uprating report.
There were good reasons for equalising the allowance and these were set out in the PTBR report where it stated that the provision of a larger tax allowance solely on the basis of age is inequitable and that this practice should be phased out. Advisers deemed this measure to be sensible, particularly with reference to improving horizontal equity.
So, whilst I do have sympathy with this amendment, I can’t support it because it will mean a double hit on working age people and because it goes against the direction already agreed under Personal Tax and Benefit Review.