Oral Answers to Questions

Lord Grayling Excerpts

Tuesday 26th January 2021 Commons Chamber

[Rishi Sunak]

I will have to go and check the exact figures, if the hon. Lady will forgive me for not knowing the specific paragraph that she refers to. In general HMRC is providing easements over the next few months as we transition to a new set of trading relationships, but she can rest assured that we are always mindful of the impact on revenue and intend fully—very much so—to have a robust set of mechanisms in place. As she will know, there is a phased response for getting to that point between now and July, and hopefully we can work with her to make sure that that path is as seamless as possible.

[Chris Grayling (Epsom and Ewell) (Con) [V]]

The Chancellor has been widely praised for his work in recent months, but he has also been honest about difficult decisions ahead. I have had constituents raise concerns with me about capital gains tax. He will know that the current rates were set to optimise revenue from the tax. I know he cannot comment on individual measures, but can I seek his assurance that he will not take any steps to raise taxes without doing a proper assessment of the Laffer curve principle that higher rates do not always lead to higher revenues?

[The Financial Secretary to the Treasury (Jesse Norman)]

I thank my right hon. Friend for his question, which tempts me into indiscretion. He may be aware of this, but HMRC publishes annual estimates to illustrate the impact of changes in tax rates in a document sexily entitled “Direct effects of illustrative tax changes”. It is worth saying, however, that these estimates are themselves uncertain, because of different levels of behavioural response to tax changes, the potential for wider macroeconomic impacts and, of course, the interaction with other measures.