PRESS RELEASE 3 March 2001

Things can get better - LPU's Pre-Budget Submission

The LPU today called on the Chancellor to use the 2001 Budget to step up his fight against poverty and inequality. With the public finances in such good health now is the time to substantially increase the rewards low paid families.

The Budget must include the following measures to support low paid workers:

• Widening the 10p income tax band by at least £2,738. This would mean a full-time worker on the National Minimum Wage, with an annual income of £7273, would only pay tax at the 10p rate. Currently NMW workers pay the same rate of tax as someone earning £30,000;
• Reforming the National Insurance Contributions system by: extending the entitlement to contributory benefits to all employees; and raising the Upper Earnings Limit to the higher tax rate threshold (raising £700 million)or abolishing it altogether (raising £3 billion).

Bharti Patel, Director of the Low Pay Unit, said:
"We welcome the gains that households on low incomes have made from the previous budgets. The focus of this budget must be not only to raise incomes of low paid families, but to raise the wages of low paid workers, in order to truly begin tackling the cause of poverty - low pay".

For further information, contact Bharti Patel on 020 7435 4268