Tax Cuts: Fiscal Impact

Baroness Kramer Excerpts

Wednesday 13th July 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, I hope the noble Lord will join me in welcoming the better than expected growth figures that we saw today, but he is right we need to continue to invest in our economy. That is why we are investing in our future skills system and more in infrastructure across the UK, and we will continue to do so to drive growth in our economy.

[Baroness Kramer (LD)]

My Lords, the cruel inflation which has hurt so many families and so many businesses has delivered the Government a bumper windfall in value added tax, now estimated to be well north of £40 billion. Will she campaign to her friends in the other place and ask them to use that money to get rid of the increase in national insurance contributions, for the sake of individuals, but also of businesses, which need that money? Will she also ask them to keep the increase in the threshold?

[Baroness Penn (Con)]

My Lords, I think my friends in the other place are doing a good job of campaigning themselves. My understanding is that, although VAT receipts are higher, the fact that individuals are spending more of their money on things such as energy, which have a lower rate of VAT, means that the latest OBR forecasts saw overall government receipts from VAT reducing in the next year.