Income Tax: Top Rate

Debate between Lord Hamilton of Epsom and Lord Newby

Monday 16th March 2015 Lords Chamber

[Lord Newby]

But, my Lords, the top 1% of income tax payers is now paying between 27% and 28% of all income tax, which is a higher proportion than at any point during the last Labour Government. The two changes that I have mentioned, which bring in more than £6 billion extra a year, apply only to the highest earners.

[Lord Hamilton of Epsom (Con)]

My Lords, despite the comments of the noble Lord, Lord Kinnock, is it not true that lowering tax rates increases revenue, and does that not make it rather surprising that the Liberal Democrats are not prepared to lower the top rate to 40%?

[Lord Newby]

No, my Lords, it does not. HRMC estimates that if you reduce the top tax rate from 45% to 40%, the likely cost to the Exchequer will be about £1 billion.

Barnett Formula

Debate between Lord Hamilton of Epsom and Lord Newby

Tuesday 10th February 2015 Lords Chamber

[Lord Newby]

My Lords, it is always a pleasure to agree with the noble Lord. It is, however, worth underlining the point that he has just made. There would be a £6 billion deficit compared to the figures in the Scottish Government’s November 2013 White Paper in respect of oil revenues, which would mean that for that reason alone the Scottish deficit in 2016-17 would be more than 6% of GDP, one of the biggest in the developed world.

[Lord Hamilton of Epsom (Con)]

My Lords, as the progress of Scotland towards independence seems to be almost inexorable, should we not be getting them used to the idea of doing without English money and phasing out the Barnett formula over a period of years?

[Lord Newby]

Well, my Lords, that is exactly what we are doing. The transfer of tax revenue to the Scottish Government means that the block grant, the element to which the Barnett formula applies, is falling by two-thirds from approximately £30 billion to £10 billion.

Employment: Private Sector Jobs

Debate between Lord Hamilton of Epsom and Lord Newby

Thursday 30th January 2014 Lords Chamber

[Lord Newby]

My Lords, I do not agree with that basic proposition. I do not think the losers far outnumber the winners. I remind the noble Baroness that there was an increase in employment of some 450,000 in the past 12 months. All those people are winners. Many people on modest incomes have benefited by several hundred pounds as a result of the increase in the income tax threshold. There are very many winners already, and as the economy continues to grow, there will be a lot more.

[Lord Hamilton of Epsom (Con)]

Does my noble friend accept that past economic recoveries have always started in London and the south-east and they then spread to the rest of the country? The noble Lord, Lord Harrison, and other noble Lords opposite should be patient. I am sure the benefits will come through by May next year.

[Lord Newby]

My Lords, one of the interesting things that came out of the cities report, to which the noble Lord, Lord Harrison referred, was the beneficial effect that London has on the rest of the country. For example, that report shows that in Southampton in the period 2008-12 local firms cut their employment by 7% but London-based firms investing in Southampton increased their employment by 24%. That is the way in which a successful London helps the rest of the country and why the Centre for Cities came to the conclusion that constraining London’s growth would harm the UK economy generally.

Banks: Payment Protection Insurance

Debate between Lord Hamilton of Epsom and Lord Newby

Monday 13th January 2014 Lords Chamber

[Lord Newby]

My Lords, there is a certain amount in what the noble Lord says, but I repeat what I have said: there has been a huge amount of publicity around this issue and not only have a very considerable number of people made claims, but £12.9 billion has been paid out in respect of those claims.

[Lord Hamilton of Epsom (Con)]

When will my noble friend go a little further than Vickers and actually break up those banks that are too big to fail and seem also to be too big to manage?

[Lord Newby]

My Lords, again this is something that we have debated at some length. The Government have taken effective steps to ring-fence retail banks and to make sure that a resolution position is in place so that if they get into difficulties, there is a prearranged way of dealing with that to ensure that the Government are not faced with the problems they had in 2008, when essentially all the banks which got into financial difficulties had to be propped up.

EUC Report: MiFID II

Debate between Lord Hamilton of Epsom and Lord Newby

Tuesday 26th March 2013 Grand Committee

[Lord Newby]

I am sure that some people in any country will want to do virtually anything, but the question I was addressing was whether the 11 countries that have signed up to this tax can be dismissed as not knowing what is best for them, even though we are deeply sceptical about it and are not going to sign up to it. We have had a number of debates in your Lordships’ House about Greece, for example, in which some noble Lords seem to have known what is best for Greece. It is just that the Greeks have not agreed. We have to let other member states move forward with this within the rules because they are keen to do so.

[Lord Hamilton of Epsom]

Does my noble friend accept that at one stage the Germans were very much against this proposal and then they changed their mind? Was it that they did not know what was best for them originally and then they did know subsequently, or did they get it the other way round?

[Lord Newby]

I think that my noble friend should ask them because I have not the faintest clue what was in their mind, but they have now formed a view. If the German Government have a settled view, even if I do not agree with it, I would not write it off as a mad one. I am sure that we will come back to the financial transaction tax, but it is not unreasonable to say that an extremely complicated tax using very difficult mechanisms to make it work should necessarily be capable of instant analysis in terms of how we are going to deal with it. We are looking at it. We have had the proposal for only a few weeks, and my right honourable friend Greg Clark, as the noble Lord, Lord Harrison, pointed out, is actually one of the better Ministers in any Government in terms of working with Parliament and, indeed, across the EU. I am sure that in due course he will come back with a full description of our response.

Taxation: Tax Collection

Debate between Lord Hamilton of Epsom and Lord Newby

Tuesday 5th February 2013 Lords Chamber

[Lord Newby]

I am surprised that the noble Lord does not know that the Government are committed to introducing a general anti-abuse rule in this year’s Finance Bill.

[Lord Hamilton of Epsom]

My Lords, the Government could do with fewer tax inspectors if they simplified the tax system. How are they doing on that?

[Lord Newby]

My Lords, I think everybody agrees that we have a particularly barnacle-encrusted tax system. This Government have set up the Office of Tax Simplification, which has started work in this area. One advantage of the general anti-abuse rule is that once such a rule is in place, it should not be necessary to introduce as much new tax legislation to deal with tax abuse, because the general rule will cover it.

Banking: Offshore Accounts

Debate between Lord Hamilton of Epsom and Lord Newby

Tuesday 20th November 2012 Lords Chamber

[Lord Newby]

I can reassure the noble Lord that we are being constrained not by European Law but by international accounting standards. There is no suggestion that Starbucks and the other companies are breaking the law but the accounting standards allow them to manipulate the point at which they take a tax charge on revenues that they raise.

[Lord Hamilton of Epsom]

My Lords, would it be possible to stop Google paying the minimal amount of tax as it is an international global company in whatever part of the world where the tax is the lowest?

[Lord Newby]

This is why we need increased international co-operation and why the G20 initiative is so important. Obviously if people can just shift off all their revenues to a low tax jurisdiction, some companies are going to do so. We are working very hard with our international partners on this because we have a common interest in making sure that these companies pay a fair share of tax.