Amendment of the Law

Debate between Lord Foster of Bath and Jonathan Edwards

Monday 26th March 2012 Commons Chamber

[Mr Don Foster (Bath) (LD)]

I am delighted to follow the right hon. Member for South Shields (David Miliband) who said quite clearly that the coalition Government were not responsible for and had not invented the problem. I might ask him to consider who did. Our country has had to face the biggest boom and bust, with the biggest deficit in the G20, and has had to cope with the biggest banking failure and the biggest crisis among our European neighbours. As a result, we have seen, under Labour, manufacturing falling and personal and national debt rising to a situation in which for every £4 we spend, we have to borrow £1. Every single day, we are spending £120 million just to pay off the interest on the country’s debt. Of course this coalition Government did not create the problem: we are trying to put it right and we are now in the early stages of recovery.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The hon. Gentleman is making some pressing points, but in the light of everything he has said is he seriously saying that the priority at this time should be a tax cut for those earning more than £3,000 a week?

[Mr Foster]

Let me come to that in a moment. First, let me tell the hon. Gentleman what I thought this Budget needed to do. First, it needed to continue the process of reducing the deficit. It needed to continue to maintain confidence in the international markets not least to keep interest rates low and it needed to develop a fair taxation system. I believe that the tax policy that was introduced through this Budget is a fair one. It has moved us more rapidly than many of us could have hoped to a Liberal Democrat aspiration to achieve a tax threshold of £10,000. As a result of what this Government have done by lifting that tax threshold to more than £9,000 by April next year, we will have taken 2 million of the lowest paid out of paying tax altogether and 24 million people will have been given a tax cut of more than £500. That is in marked contrast to the 5 million low-paid people who had to pay more under the Labour Government who cut the 10p income tax band.

The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) seems to suggest that the rich are getting off lightly, but if he looks at all the figures, he will see that that simply is not the case. Under the measures that have been included in the Budget with the 7% increase in capital gains tax, the 15% on stuff that is owned offshore by foreign companies and the measures on tax loopholes, the figures demonstrate that those who are best placed to pay will be paying even more as a result of this Government.