Making Work Pay - McDonnell

In a letter to John McDonnell, Shadow Chancellor, Tax and the Family has welcomed the importance he attached to making work pay for families in a speech at the launch of the Resolution Foundation’s report on Living Standards (Living Standards Audit 2019). The letter draws attention to the very high marginal rates – often as high as 90% – faced by a large number of families. It is very difficult for a family to raise its living standards if the State takes back 80-90p from every extra pound earned. If the decline in living standards and increase in child poverty is to be reversed, any tax reductions which can be afforded should be focussed on households with children. Tax and the Family suggests how this might be done.

Adam Corlett of the Resolution Foundation said at the launch of the report said that there was “a real need to use the tax and benefit system to help parents and children”. Tax and the Family have repeatedly been making this point. It is encouraging to see others now making the same point. Two thirds of children in poverty are in couple households with children. The report says that the majority (58 per cent) of people with low to middle incomes are couples with children.

To see our letter click here.

To see both John McDonnell’s and Adam Corlett’s speeches click here.

To download the full Resolution Report click here.