JRF response to David Cameron’s speech: Tax giveaway will bypass poorer working families

Responding to David Cameron’s pledge to raise the personal tax allowance, chief executive of the independent Joseph Rowntree Foundation (JRF), Julia Unwin said:

“Raising the personal tax allowance to £12,500 is a noble intention and of course will be welcomed by many, but it will bypass working poor families in the greatest need and the same increase in incomes could be achieved at a much lower cost. 

“The policy will benefit a working couple with two children earning low wages by £20 a week, costing £11.5 billion. But the best way to ensure extra support reaches people on low incomes is reforming Universal Credit, so workers keep more of their earnings before benefits are withdrawn. This approach would deliver the same benefit, but cost between £1 billion and 4 billion.   

“Families on low incomes should be allowed to keep more of what they earn. But improving prospects for people living in poverty has to go beyond changes to the tax and benefits system. 

“This means a comprehensive approach, with more secure, well-paying jobs in our economy and action on the high cost of living. As David Cameron said, it is not enough to ‘pontificate about poverty’. We need all political parties acting to reduce it.”