§ Mr. AlexanderTo ask the Chancellor of the Exchequer what measures he has put in place to increase the financial reward from work. [146120]
§ Dawn PrimaroloThe Government have put in place a series of reforms to increase the financial rewards from work.
The national minimum wage of £3.70 an hour ensures fair minimum standards of pay and has benefited between 1.2 and 1.5 million people since its introduction in April 1999. The introduction of the 10p tax rate in April 1999 halved the marginal tax rate for 1.8 million people in low-paid work. Reforms to National Insurance Contributions and in particular the abolition of the unfair entry fee, and the rise in the Lower Earnings Limit, have taken an estimated million low-paid workers out of paying national insurance, while protecting their entitlement to benefits.
The Working Families Tax Credit (WFTC), introduced in October 1999, is designed specifically to increase the financial rewards to work for low and middle income families with children. This recognises the particular problems faced by parents in seeking work and includes specific help with child care costs through a new Childcare Tax Credit. On average, families on WFTC are £30 a week better off than under Family Credit. Combined with the, minimum wage WFTC ensures a minimum income for a family with someone in full-time work of £214 a week.