(4 years, 6 months ago)
Commons ChamberI should point out to the right hon. Gentleman that we were trying to make a short-term increase, we went through with the Treasury how we could do this quickly, and the quickest ways were by increasing the local housing allowance and UC, rather than other benefits, as I have mentioned. On the situation in London, I am conscious that aspects of the housing benefit regulations went through a month ago, but not all councils have applied them. What we have done with the thresholds means that people in London should be able to see an increase in the amount of money they get in housing support, but otherwise it is not the Government’s intention to change the current threshold of the benefit cap.
I wish to follow on from the point made by my hon. Friend the Member for Aylesbury (Rob Butler) about directors of small companies. The Government have done very well to protect people on PAYE and people who are self-employed, but directors of small companies fall through the cracks and it really is not good enough just to say, “They can fall back on universal credit”, because in many cases they will not qualify and because we have protected other sectors. We must do better, and we must sort out how we are going to protect the directors of small companies.
My hon. Friend will know, having been an accountant, that a variety of people will potentially receive dividends from a company, and it is not currently possible for Her Majesty’s Revenue and Customs to know whether somebody has given this to themselves in lieu of a salary or whether it is a payment to an investor. It is a different situation where people have chosen to finance their income from the business in that way, and he will be aware that the rate of tax on paying dividends is 7.5%, once someone goes above the dividends allowance. How people who are self-employed through a normal PAYE scheme would pay aspects of national insurance and tax directly is quite different. The Treasury, in devising the scheme, has sought to try to identify as many people as possible it could help, and achieving that for 95% of self-employed people is a pretty good outcome.