Income Tax Debate

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Department: HM Treasury

Income Tax

Lyn Brown Excerpts
Wednesday 28th November 2012

(11 years, 5 months ago)

Commons Chamber
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David Gauke Portrait Mr Gauke
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My hon. Friend sets out some dramatic numbers. They are the correct numbers, although it would be right to say that an element of that had to do with forestalling and people moving their income around. However, Opposition Members should not take great comfort from that. They demonstrate the enormous amount of behavioural change as a consequence of high rates. That level of forestalling is striking. What is also striking is that when the previous Government made their estimate of what would happen with income, no allowance was made for forestalling whatsoever, which again demonstrates flaws with the methodology that was in place.

Lyn Brown Portrait Lyn Brown (West Ham) (Lab)
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The hon. Gentleman makes an erudite argument, as always, and he sounds plausible, but can he not see that ordinary families, who are losing at least £500 per year, facing difficulties buying food and struggling with petrol costs, find it really hard to stomach why the Government are choosing to give £107,000 per year to people who are earning £1 million? It does not make sense to them. It does not make sense to us.

David Gauke Portrait Mr Gauke
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In the Office for Budget Responsibility assessment there is a tax cut of £100 million that goes to those who are paying the 50p rate.

In the same Budget package, however, there are measures to deal with stamp duty avoidance on properties over £2 million, a stamp duty increase on properties over £2 million, which is bringing in revenue, and caps on reliefs directed at high-earning individuals. So who is paying the stamp duty and not benefiting from the reliefs as before? They are high-earning individuals. They are paying for the cut in the 50p rate five times over as a consequence of the measures announced in the last Budget. That is the explanation to the hon. Lady’s constituents, and mine, of how the cut is being funded.