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We have touched upon issues of year-end adjustments. I quote again the figure that each year at least 200,000 men and women move into new and better jobs and see their family income rise by more than £10,000. The noble Lord, Lord Oakeshott, in particular, talked about the IFS report. In response I say: look at the evidence. Employment, which my noble friend Lord Giddens touched on, is at record levels, with 28 million people in work. The UK’s employment rate is the highest of the G7 economies bar the US and Canada. Since 1997, New Deal programmes, which are part of the strategy, have helped reduce long-term youth unemployment and long-term unemployment by over two-thirds. Working tax credit provides financial support on top of earnings and, together with the national minimum wage, helps to improve work incentives and relieve in-work poverty. Lone parent employment has risen by 11.3 percentage points to 56.6 per cent, the highest on record. There are now over 1 million lone parents in work, over 300,000 more than in 1997.

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The noble Baroness, Lady Noakes, made a number of points on marginal tax-rate issues and on the Chancellor’s approach to those matters. I have no doubt that a Chancellor who is about tackling poverty and improving incentives to work and who wishes to reduce tax burdens for low-to-middle-income families would make an excellent Prime Minister, as I am sure that he will.

I have run out of time. I hope that noble Lords will forgive me for not having dealt with all the points that have been raised. I conclude by saying that tax credits and economic stability have helped to increase the number of people in work by more than 2 million since spring 1997. Since 1997, long-term unemployment has reduced by 450,000. Tax credits have improved work incentives, reduced the tax burden on low-to- middle-income families and helped to reduce child poverty dramatically. Of course, we should remain vigilant to the administrative challenges that these bold measures create, but we should celebrate the outcome of the policy and the substantial improvement it has made to the lives of many.

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