Inequality: Income and Wealth

Debate between Lord Deighton and Lord Dubs

Monday 11th March 2013 Lords Chamber

[Lord Dubs]

To ask Her Majesty’s Government what plans they have to tackle inequality in income and wealth in the United Kingdom.

[The Commercial Secretary to the Treasury (Lord Deighton)]

My Lords, fairness underpins the Government’s plans to reduce the deficit. Universal credit will allow people to keep more of their income as they move into work, while the personal allowance increases announced by this Government will benefit 25 million individuals. As a result of this Government’s actions, the richest pay more tax on capital gains, more stamp duty on their homes and more tax on their pensions, and they are less able to avoid or evade tax.

[Lord Dubs]

Listening to that Answer, one would not be aware that the disparities in wealth and income in this country have reached record levels. Will the Minister confirm that 1% of the top earners earn 10% of income? The Government are being criticised on the grounds of their inequality policies by everybody from the bishops to the anti-poverty lobby—people who know what is going on. Further, does he not agree that when inequalities in a country get beyond a certain level, as they have here, our social cohesion is seriously damaged?

[Lord Deighton]

With respect to the 1% of the top taxpayers, the first point I would make is that actually they are responsible for paying 24% of income tax. The top 10% pay just under 50% of income tax—I think it is 44%—so their contribution to our revenues is the greatest in proportion. As for the development of inequality since this Government came into office, the commonly accepted measures of income inequality have in fact decreased.