Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 9th December 2014 Commons Chamber

[Mr Gauke]

It is right that we have reduced the corporation tax rate. Next year, it will give us the lowest rate in the G20. That is resulting in greater investment in the UK. It would certainly be a mistake to reverse that policy, as the Labour party intends. In terms of the diverted profits tax, I would point out that it will help to deal with aggressive tax avoidance. We will publish the draft legislation on that tomorrow, setting out the full details of how it will operate.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The House knows that I am an avid listener of the “Today” programme. Did the Minister hear the interview this morning, which showed how ineffective it is to have this great gap between the rich and the poor in our country? The tax system is increasing that gap, not helping it. What is he going to do about it, because it makes our economy less efficient?

[Mr Gauke]

As it happens, the distributional analysis shows that our policies have narrowed the gap. The point is that we have made changes to our tax system to ensure a greater contribution from the wealthiest in terms of stamp duty land tax and capital gains tax. We have reduced some of the reliefs and exemptions that meant some high earners did not pay taxes. I am afraid that the idea that a 50p rate was effective in achieving such objectives—including raising revenue—is simply wrong.