Amendment of the Law

Debate between Alex Cunningham and Douglas Carswell

Thursday 20th March 2014 Commons Chamber

[Mr Douglas Carswell (Clacton) (Con)]

It made a pleasant change to listen to a Budget that had not been pre-announced in the previous day’s newspapers. That is as it should be, and it is a welcome change from what went on in the past, when details were leaked and briefed beforehand.

Parts of the Budget are absolutely magnificent, and I am particularly pleased about the decision to raise the income tax threshold. Many of my constituents are on relatively low incomes. Before 2010, people paid income tax after the first £6,500 of income, but now they will pay it only after the first £10,500. It is absolutely right that people be allowed to keep more of the money that they earn. It is absolutely fair to have this tax break—it is a tax break for everyone—and it does the right thing by incentivising work. It helps to end the crazy situation that has been engineered whereby the state takes tax from families with one hand and gives handouts with the other—a bizarre situation that got vastly worse between the years 2001 and 2010.

[Alex Cunningham (Stockton North) (Lab)]

The hon. Gentleman talks about the £10,500 limit, but will he spare a thought for the thousands of workers on Teesside, and millions more across the country, who do not earn anywhere near £10,500? They are seeing a rise in the cost of living, energy bills and everything else, and they are not benefiting at all from the Budget. Has he got something to say to them?

[Mr Carswell]

I would love to cut tax right across the board on a whole range of things, which would help people in that situation. The reduction in income tax for people on relatively low incomes will undoubtedly be welcomed.

I am also thrilled and delighted—it warmed the cockles of my free-market heart—to hear about tax breaks for savers. With interest rates having been so low for so long, it has been a pretty torrid time for savers. The raising of the personal tax-free savings allowance is fantastic news. So, too, is the removal of the artificial distinction between different types of ISAs. The more we can encourage people to save, the better. One person’s deferred consumption and saving is somebody else’s loan or credit.

I cheered, too, when I heard about giving folk flexibility as to how they use their pension pot. The implications of that are potentially profound and radical. It could mean that pension pots no longer die with people. It could mean that they become a vehicle for passing wealth down the generations. The implications are potentially huge and welcome.