Taxation: Income Tax

Baroness Farrington of Ribbleton Excerpts

Monday 24th June 2013 Lords Chamber

[Lord Newby]

My Lords, I could not possibly comment on that last point. I refer the noble Lord, and indeed all other noble Lords, to the extremely comprehensive assessment made by HMRC last year, entitled The Exchequer effect of the 50 per cent additional rate of income tax.

[Baroness Farrington of Ribbleton]

My Lords, the Minister acceded to the point that announcing in advance that tax rates will change leads to a change in people’s habits. Why did the Government give people so long to avoid paying this tax? The proposed spending on facilities for troops returning from Afghanistan, for example, will have to be paid for over a long time. Does the Minister accept that this could be paid for much more quickly if that decision had not been taken?

[Lord Newby]

My Lords, the noble Baroness will remember that the 50p tax rate was introduced by her colleague Gordon Brown during his premiership and that a long period of notice was given. The rate was not introduced by this Government. As far as paying for troops who are coming back from Afghanistan is concerned, that will be paid for out of general revenue, which is the right way of doing it.