Income Tax Threshold
Debate between Baroness Penn and Lord Balfe(1 year, 4 months ago)
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Lord Balfe
To ask His Majesty’s Government what plans they have, if any, to adjust the threshold for the higher rate income tax of 40 per cent to account for inflation.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
The income tax higher rate threshold is still high enough to protect the vast majority of people from paying the higher rate of income tax. Around 80% of all income tax payers pay at the basic rate. The Government must ensure that the tax system supports strong public finances, and it is right that those who earn more contribute more.
Lord Balfe (Con)
I thank the Minister for her reply, but I remind her that paying tax at 40% used to be a sign of achievement in this world and the middle classes—the middle earners on whom the prosperity of this country depends—are getting gradually poorer, with 1 million more of them paying higher rate tax in the last two years. With the withdrawal of child benefit, the effective rate of tax between £50,000 and £60,000 is around 61%. I know the Labour Party is not standing for lower taxes either, but does the Minister really believe that the country is going to be incentivised to perform well if it is crippled by this level of taxation?
Baroness Penn (Con)
My Lords, of course, the Government want to bring taxes down. It is worth reminding noble Lords that since 2010 we have nearly doubled the personal allowance and, this year, around 30% of those with income are projected to pay no income tax at all. In our current circumstances, we need to be fiscally responsible, and the best tax cut we can give people is to cut inflation.
NHS Test and Trace
Debate between Baroness Penn and Lord Balfe
Baroness Penn (Con)
My Lords, more than 80% of the budget for test and trace goes towards the testing part of that programme. That has proved highly effective. The programme is working to increase its partnership with local authorities and local directors of public health. We are also reducing our reliance on private sector contractors by around 17%, but we recognise the work that those partners have done with us in building up the system over the past year and continue to work with them where it is in the best interests of the country.
Lord Balfe (Con)
My Lords, the latest variant is pretty mild—deaths have gone right down—but we are spending billions of pounds on this, while huge waiting lists are building up in the NHS. Is it not about time that this programme was wound down and the money spent on the millions of delayed operations and procedures?
Baroness Penn (Con)
My Lords, we are looking at the evidence in relation to the variant and the effectiveness of the vaccine against it all the time. I assure my noble friend that additional resources have already gone into the NHS to catch up on those waiting lists that have grown because of the pandemic. If we were to get this wrong and there were increased hospital admissions due to Covid, we would not be able to make the progress that he and we all want to see on tackling those waiting lists.
Central Bank Digital Currency
Debate between Baroness Penn and Lord Balfe
Baroness Penn (Con)
My Lords, I reassure the noble Lord that the Government recognise that cash remains important to millions of people across the UK and have committed to legislating to protect access to cash in this country.
Lord Balfe (Con)
My Lords, while I can understand that a CBDC will help business if it can be got off the ground, can the Government assure us that the status and backing of this currency will be as firm as the real currency that we currently enjoy?
Baroness Penn (Con)
I can absolutely reassure my noble friend on that point. A central bank digital currency would need to be a risk-free currency backed by the central bank, and it would need to coexist with and complement existing forms of money.
Covid-19: Social and Economic Inequalities
Debate between Baroness Penn and Lord Balfe
Lord Balfe (Con) [V]
My Lords, we seem to forget that this huge amount of money we are spending will have to be paid back by the same future generations about whom we are talking. Do the Government have any plans to cut back on expenditure and to examine, for example, the triple lock? It seems to exempt people in my age group from making any contribution at all towards building back.
Baroness Penn (Con)
The Government are conscious of this. We distinguish between short-term help during the pandemic—where the extra support we are putting into families and livelihoods will prevent the worst outcomes that could occur during this recession—and the medium term, when we will need to get the public finances back on to a sustainable footing.