Oral Answers to Questions

Debate between Mark Pritchard and David Gauke

Tuesday 29th January 2013 Commons Chamber

[Mr Gauke]

I can remember one particular tax simplification from the last Government, which was the abolition of the 10p rate. I think we have a better record than that.

[Mark Pritchard (The Wrekin) (Con)]

Following on from my hon. Friend the Member for Witham (Priti Patel), who made her case well, given that the Exchequer benefited from the courageous decision to reduce the top rate of tax from 50p to 45p, may I encourage the Chancellor to go even further in the Budget and reduce the top rate of tax to 40p, in order to see more funds come into the Exchequer?

[Mr Gauke]

I will take that as a Budget representation. The point is that the 50p rate was not effective in raising revenue—my hon. Friend is absolutely right to make that point—and it was damaging to our competitiveness. There are better ways in which we can get more money from the wealthiest, and that is exactly what this Government have done.

Income Tax

Debate between Mark Pritchard and David Gauke

Wednesday 28th November 2012 Commons Chamber

[Mr Gauke]

I note with interest that the hon. Lady appears to be arguing that an increase in tax can sometimes lead to a loss of revenue. She is right—that can sometimes happen. As it happens, the revenue on stamp duty land tax is holding up all right, but she makes an important point, one that I hope is understood more widely in her party. I am pleased that the Opposition are keeping open the option of not increasing the 45p rate of income tax. Although it is right that those with the broadest shoulders bear the greatest burden—I will set out how the Government are making that happen—it is also necessary to ensure that the UK is competitive in attracting wealth creators to locate and stay in this country. A Government that are serious about the UK winning the global race for growth should be very careful about pursuing a policy that places a huge “closed for business” sign over our economy. That is exactly what the 50p rate of income tax was—a “closed for business” sign. I hope that at the next general election there will be a consensus that we do not want to re-erect that sign over our economy.

[Mark Pritchard]

The new growth guru in Europe is of course President Hollande of France, who is well known to the Opposition Front Bench. I wonder whether my hon. Friend thinks that the higher 75p rate of tax in France has helped entrepreneurs and business people to stay within France, or to flee to other shores, such as the low tax economy in Britain.

[Mr Gauke]

My hon. Friend raises an interesting point. Perhaps I should not be drawn too much into discussing the domestic policies of one of our close European allies, but it will be interesting to see the impact in France of a very high rate of income tax, and whether people will move out of that country and we see any additional revenue as a consequence.