Taxation: Income Tax Threshold

Debate between Lord O'Neill of Gatley and Lord Clark of Windermere

Wednesday 16th March 2016 Lords Chamber

[Lord O'Neill of Gatley]

My Lords, of course I am not going to rise to that bait, but I would like to point out—and it is another reason why I encourage people to study the Red Book in close detail—that, in contrast to the mood among many observers and certainly in the media, the target for this year’s nominal budget deficit has come in lower than forecast at the Autumn Statement. The only reason that it is at the same level as a share of GDP and that the overall current debt level to GDP is higher than desired is the evident other news that the level of nominal GDP was significantly lower than before. In terms of policy, and on the contrary to what was said in that question, the plan is very much in place and on target.

[Lord Clark of Windermere (Lab)]

My Lords, the Minister has quite rightly taken pleasure in announcing the higher level of income that people can earn before they start to pay tax at 20%, and of course we welcome that. But there is a group of people who, it was announced in the Budget, will lose 100% of their income. I am talking about disabled people in receipt of personal independence payment. The Chancellor evaded the details of that decision, so I wonder if the Minister can advise the House of the Treasury’s estimate of the number of disabled people who will lose part or all of their benefit.

[Lord O’Neill of Gatley]

My Lords, I plan to make some longer comments specifically about this sensitive issue next week when I open the debate on the Budget. There are some very important complexities behind the policies which, frankly, were misunderstood in the way they were reported at the weekend.

Income Inequality

Debate between Lord O'Neill of Gatley and Lord Clark of Windermere

Thursday 21st January 2016 Lords Chamber

[Lord O’Neill of Gatley]

My Lords, I take the noble Lord’s suggestions with great interest. I repeat that it is the responsibility of boards and their shareholders to analyse and support the compensation of their chief executives. As we have touched on in parts of the productivity plan, those boards and shareholders should think carefully on an ongoing basis about the justification for those levels of remuneration.

[Lord Clark of Windermere (Lab)]

My Lords, I think that a number of us were surprised by the Minister asserting that inequality has actually been decreasing over recent periods. Does that take into account the zero-hours contracts and the regional variations?

[Lord O’Neill of Gatley]

My Lords, it is a reality of life that, when evidence gets in the way of perception, it surprises people. But on the widely accepted global measures—of which ours is one—measured inequality has been declining slowly since the 1980s, whether they include disposable income or are without it.