Oral Answers to Questions

Neil Parish Excerpts

Tuesday 18th July 2017 Commons Chamber

[Mel Stride]

My hon. Friend is entirely right. The Labour party would constantly have us believe that somehow we are being soft on the wealthy and hard on the less well-off when the precise opposite is true. The top 1% pay over 27% of tax, and the wealthiest 3,000 people in our country pay as much as the poorest 9 million. Under Labour, the poor paid more tax relative to the wealthy, not less. No wonder that under our policies income inequality is at a 30-year low.

[Neil Parish (Tiverton and Honiton) (Con)]

12. If he will make an assessment of the potential merits of merging income tax and national insurance.

[The Financial Secretary to the Treasury (Mel Stride)]

The Government are committed to simplifying the tax system. In 2015, we asked the Office of Tax Simplification to provide an independent assessment of the alignment of income tax and national insurance contributions. We have already taken action in a number of places highlighted by the report. However, alignment now would cause significant upheaval for millions. Now is not the right time for further reform in this area.

[Neil Parish]

I welcome my right hon. Friend to his new ministerial role. Last year the Office of Tax Simplification said that bringing national insurance and income tax closer together would create a simpler and fairer system for business and taxpayers. As national insurance and income tax revenues go into the same pot, would it not be simpler and clearer to merge the two and have one single income tax?

[Mel Stride]

As I said, we recognise the value of merging national insurance and income tax where that is practical and achievable, and there are some measures coming up in the Bills in the autumn that will address that in certain circumstances, but to do it right across the piece at this stage is perhaps a long-term aspiration rather than one we will be addressing in the short term.

Balancing the Public Finances

Neil Parish Excerpts

Tuesday 11th July 2017 Westminster Hall

[Mr Harper]

My hon. Friend, who makes a good point, tempts me to leap forward to the end of my remarks, but I will say only this about taxes: there is a big difference between rates of tax and how much money is raised. As Conservatives, we believe that the purpose of taxes is to raise money to pay for our public services. The Chancellor made it clear in the debate on the Queen’s Speech that by reducing the tax rate, thereby encouraging businesses to locate here and be more successful, we raised more money to pay for those public finances—I think the Chancellor said £18 billion more.

Looking at that performance, it seems to me likely that if we were to raise corporation tax two things would happen: first, we probably would not raise the money, so although we might pat ourselves on the back and pretend that we were raising taxes, we would not raise the money to pay for public services; and secondly, it is fairly obvious to everyone, or to everyone on the Government side of the House, that those taxes do not fall on businesses at all. When we raise taxes on business, there is no mystical “business” to pay them; those taxes fall either on workers, who will receive smaller pay rises, or on customers, who will see higher prices. Taxes all feed through, so everyone in the economy would pay the price of any corporation tax rises, which probably would not raise any more money to pay for our public services, so we would be shooting ourselves in the foot. My hon. Friend the Member for North Warwickshire (Craig Tracey) makes exactly the right point.

I also want to mention our record on jobs, which is what I am proudest of: 3 million more people are now in work than were when we first came into office. Let me give the specific example—I think this will be heartening—of the impact on young people. In 2010 the unemployment rate among young people in this country was about 20%, which is comparable with that of our neighbours in the European Union and in the eurozone. Since we came into office, to this point, in those countries the unemployment rate among young people has been broadly flat, up a little but still around 20%. In our country it is down six percentage points, to 13%. That is not just a statistic; it means that hundreds of thousands of young people have had the opportunity to get a job when they leave school, college or university.

[Neil Parish (Tiverton and Honiton) (Con)]

I thank my right hon. Friend for securing the debate. We reduced corporation tax from 28% to 20% but actually increased the tax take. As we exit the European Union, we will need to encourage more businesses to come to this country and create more employment, so it is essential that we reduce taxes further, rather than putting them up. That is the difference between the Government and the Opposition.

[Mr Harper]

My hon. Friend makes a good point. As we are going to leave the European Union, we want to be more global and outward-looking and we want more companies to locate in Britain, so it seems to me that this is exactly the wrong time—if there ever is a good time—to increase corporate tax rates.