Tax Burden and Economic Growth
Debate between Viscount Goschen and Lord Wilson of Sedgefield(1 week, 6 days ago)
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Lord Wilson of Sedgefield (Lab)
My noble friend asks a very important question which is central to this Government’s plan for growth and devolution. Closing regional productivity gaps is a major economic opportunity, with productivity in northern cities around 20% lower in than similar-sized cities in the OECD. If we are able do that, we can boost UK GVA by £82 billion. We are devolving more power to local leaders and investing in transport and housing infrastructure. The aim is not simply to redistribute existing growth but to increase the productive potential of major cities around the country. We are going to rely on regional mayors, for example, to ensure that they have a say in how that growth takes place.
Viscount Goschen (Con)
My Lords, coming to the basics of the argument, why do the Government believe that raising taxes and increasing regulation promote growth?
Lord Wilson of Sedgefield (Lab)
As I have said, we have one of the most productive tax regimes in the world. We can see that by the amount of money that is raised and the number of people who are in employment. There have been only two years in the last 150 years that have seen a higher figure. We are in a position where we have to raise taxes to help solve the problems that we were left with two years ago. We will press on to make sure that the economy is as productive as it can be.