Income Tax: Top Rate

Debate between Lord Newby and Lord Kinnock

Monday 16th March 2015 Lords Chamber

[Lord Newby]

Yes, my Lords.

[Lord Kinnock (Lab)]

My Lords, does the Minister recognise, along with most analysts, that the figures that he has just given have probably been distorted by the practice of forestalling? Does he realise that such practice by some top rate taxpayers meant that they delayed their returns from 2012 to 2013 to take advantage of the 5% top rate tax cut in the following year, after it was announced in the 2012 Budget? Instead of drawing glib conclusions from the figures that he has given, would he and Her Majesty’s Revenue & Customs not realise that each 1% increase on the top rate of income tax can generate an extra £1.1 billion? Therefore, a cut can lose £5 billion in any year following the first year after the tax cut. When we have—

[Lord Kinnock]

When we have a deficit of £90 billion, can the country really afford that when we are supposed to be all in it together?

[Lord Newby]

My Lords, I am afraid that the noble Lord’s figures are just completely wrong. The figures produced by HMRC, which I am sure he has read, showed that its central estimate of the effect of reducing the top rate from 50p to 45p was a cost of £100 million, against which should be set—among other changes that this Government have made that exclusively hit the very affluent—the changes in disguised remuneration, which brought in £3.5 billion this Parliament, and the reduction in pensions tax relief, which will bring in £5 billion a year.

Wealth Inequality

Debate between Lord Newby and Lord Kinnock

Wednesday 21st January 2015 Lords Chamber

[Lord Newby]

My Lords, the advocacy role of Oxfam and other charities is extremely important. The list of proposals in the report we are debating includes issues such as promoting women’s economic equality and women’s rights. Those goals are shared by all international development charities, which do a very useful job in bringing these important issues to wider public attention.

[Lord Kinnock (Lab)]

Does the Minister share my concern that the current division in wealth in our country—where the richest 1% of income getters have 14% of the wealth—repeats a situation that was last reached in 1914? If he does, will he tell the House what policies the Government are pursuing to try to close that gap, and especially what fiscal policies they are pursuing to have a necessary effect on the richest people in our country, whatever their place of origin?

[Lord Newby]

As the noble Lord will know, in terms of wealth, the largest assets held by most people in the UK are housing assets. The Government have taken a number of steps in terms of taxing high-value housing. There is a lively debate about that in terms of the upcoming election. As for income, I remind him that the top 1% is now paying 28% of all income tax receipts, the highest ever level.

Economy: Public Sector Net Borrowing

Debate between Lord Newby and Lord Kinnock

Monday 14th July 2014 Lords Chamber

[Lord Newby]

My Lords, on the current forecast we expect there to be a surplus in 2018-19. At the moment, as my noble friend points out, the economy is growing; we are the fastest growing economy in the G7 in the year to Q1 2014. The most recent employment figures showed that in the past year employment had risen by 780,000 and the claimant count had fallen by 406,000.

[Lord Kinnock (Lab)]

Do not the figures used by the Minister somewhat obscure serious facts about the years to which he referred? In the last four years of the Labour Government, including the crisis years 2008 to 2010, total net borrowing was £329 billion, while in the four years of the current Government total net borrowing has been £104 billion higher at £433 billion. Is not that rise in borrowing over those years a very serious indictment of government policies which have actually retarded growth, increased inequality and shrunk the economy? Is it not time for the Minister to offer something of an apology, rather than a pat on his own back?

[Lord Newby]

My Lords, it is an indictment of the previous Government. In the first year that we were in office, £1 of every £4 spent by Government was borrowed. That was completely and utterly unsustainable, and that is why we are sorting things out.

Payday Loans

Debate between Lord Newby and Lord Kinnock

Wednesday 11th December 2013 Lords Chamber

[Lord Newby]

My Lords, under the e-commerce directive, which was introduced during the lifetime of the last Government, payday loan operators are able to relocate. However, a majority of EU member states already have some kind of cap on the cost of payday loans, even if not necessarily as comprehensive a cap as we have, and there is an ongoing debate in those member states that do not yet have a cap about implementing one. There are already a majority of EU member states to which it would almost certainly be uneconomic or pointless for payday loan lenders to switch their bases of operation.

[Lord Kinnock (Lab)]

My Lords, when the lenders invariably advertise the ease of access to money and, even more crucially, the ease of repayment, can their adverts ever be anything but misleading?

[Lord Newby]

My Lords, a lot of effort is being undertaken by the FCA to make sure that the adverts are not misleading. We debated this at Third Reading of the banking reform Bill. The key thing is that people should know what the repayments are, not just in terms of the interest rate—people are very often not desperately familiar with that—but in terms of being absolutely clear about what they have to repay and when. The point that possibly lies behind the noble Lord’s question is whether there should be payday loans at all. As long as payday loans are legal, people have to make some sort of assessment about whether they are going to be in a position to repay them. What the Government and the FCA are committed to doing is to make the costs as clear as possible and limit the potential downside of less than prompt repayment.

G8: Eurozone and UK Growth

Debate between Lord Newby and Lord Kinnock

Tuesday 2nd July 2013 Lords Chamber

[Lord Newby]

My Lords, I absolutely agree with my noble friend and I do commend the website to Members of your Lordships’ House. However, I also point out that at the G8 summit significant progress was made on tax transparency, whether in promoting the standards of the Extractive Industries Transparency Initiative, promoting a new global standard for automatic information exchange, or making more information available on beneficial ownership. These are big changes on which the UK is taking the lead.

[Lord Kinnock]

My Lords, is the Minister aware that the economies of Germany and other countries are far more regulated than ours and are performing far better than ours in terms of sustained growth and exports? Does he accept that it can hardly be regulation that is the fundamental cause of the problems confronted by our people now? Is it not more to do with a stranglehold on consumption, and can he tell us how the further constriction of consumption can possibly help in generating the additional growth that we need to restore the performance of the United Kingdom?

[Lord Newby]

My Lords, the key thing now is to drive unemployment down by continuing growth. That is the way in which consumption will rise. A key element of that is making sure that interest rates stay at a low level, which is the centrepiece of what the Government have been seeking to achieve. I absolutely agree with the noble Lord, Lord Peston, that one should not count chickens, but I think that he is almost wilfully failing to count those very small chickens that may be poking their beaks out into the sunshine.

Northern Ireland: Corporation Tax

Debate between Lord Newby and Lord Kinnock

Monday 15th October 2012 Lords Chamber

[Lord Newby]

My Lords, of course, considerations of consequentials to Wales are always uppermost in the Government’s mind.

[Lord Kinnock]

In view of the Government’s ambition to withdraw from certain obligations of membership of the European Union, are they contemplating the possibility that the devolved Administration in Northern Ireland could cut corporation tax to the much lower level that is customary in the Republic of Ireland?

[Lord Newby]

My Lords, that is exactly what this whole process is about. The complication, as I said earlier, is that if you devolve Northern Ireland corporation tax rate-setting to the Northern Ireland Assembly, you face a significant financial cost to the Northern Ireland budget, which, when last estimated by the Treasury, was thought to be in the region of £300 million.