Finance Bill

Debate between Chris Evans and David Gauke

Monday 1st July 2013 Commons Chamber

[Chris Evans]

Yes, but I should tell the hon. Gentleman that I was in the Treasury Committee when Bob Diamond came to give evidence about LIBOR and that I was in the Chamber when the Chancellor announced the investigation. I listened to it and it made me sad. It made me sad because I realised for the very first time that people do not trust anybody any more. That is the problem. It goes much deeper than economics, politics, banking or whatever. People simply do not trust others any more. [Interruption.] I know that I am digressing from the new clause, Mr Deputy Speaker, and that you are itching to stop me. I want to put it on the record, however, that I genuinely feel that people do not trust each other any more. That is the saddest thing of all about this issue. It does not matter whether we are talking about Conservatives or Labour, people just do not trust politicians, journalists, lawyers or others. This is a much deeper problem than anything else for our society.

That brings me to the issue of anger about what the family man or family woman will save from what is on the kitchen table tonight. When those people hear about the tax cuts for the rich, I am sure they will think of those bankers who may or may not have committed crimes, of the journalists who may or may not have committed crimes, and of the editors of national newspapers—people earning six-figure salaries—and they will believe that those are the people who will get rewarded. That may not be the case, but that is the perception, and as we all know as politicians, the perception is usually stronger than reality. What members of the public will think about this Government and about this place is that they are run by an elite who are more interested in helping out their friends in the City than anything else. That is the real tragedy of this issue.

I have sat here and heard all the arguments about the tax cuts. Yes, I have attacked what I believe is a failed economic theory, but the truth is that the Government won the election in May 2010. I do not like that personally, and I hope that we can turn that around in 2015. The Government have the right to put whatever they want into the Finance Bill, and we cannot change it, much as I would have loved to table an amendment to abolish this tax cut. I cannot, and all we can do is bring about a review. This review is crucial because it will allow us to see how much this cut for millionaires is affecting the British economy.

This may be deemed an aside, Mr Deputy Speaker, and you may call me to order, but let me ask the Minister one more question. When the Treasury was considering the 5p tax cut, did it also consider a 1p tax cut for those whose earnings were below the threshold? If it did not consider that option, why did it not do so, and if it did, why did it rule it out?

You are clearly champing at the bit, Mr Deputy Speaker. Perhaps you want me to wind up my speech, and I shall try to do so. [Interruption.] Do not get too enthusiastic, please!

We need a review. We need to know the facts, because this is so important.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

We have heard a couple of rather lengthy speeches about a topic that is fairly familiar to those of us who have dealt with Finance Bills in the past. We discussed the reduction in the top rate of income tax at some length during the early, middle and late stages of last year’s Bill, and we have discussed it on a number of occasions during our earlier debates on this Bill. It is striking, however, that the number of Labour Back Benchers present during much of today’s debate so far has been three or perhaps four. Although we have heard some passionate and lengthy speeches, I am not sure that I need to make a lengthy speech in response, but a few basic points are worth making.

The Government agree that the wealthiest should make the biggest contribution to deficit reduction, and it will be clear to anyone who looks at our record across the board that we have stuck to that principle. In the 2010 Budget, the higher rate of capital gains tax was increased. In the 2011 Budget, we tackled a major area of tax avoidance, namely disguised remuneration. The Labour party opposed that measure in Committee, but we tackled the problem none the less, and our action has resulted in considerable extra revenue, particularly from high earners.

The 2012 Budget, which contained the measure that has provided the subject matter of most of today’s debate—the cut in the 50p rate of income tax—also introduced a new rate of stamp duty for high-value homes, measures to clamp down on stamp duty land tax avoidance, and a cap on reliefs used in the tax system, which raised an amount considerably larger than the cost of the cut in the 50p rate. The 2012 autumn statement provided for action to reduce the cost to the Exchequer of pensions tax relief, and the 2013 Budget contained further measures to tackle offshore tax evasion by, in particular, high earners.

We clearly have a strong record in this respect. We have gained additional revenue not only from capital gains tax and stamp duty, but—as is shown by the distributional analysis—from the income tax paid by the top 1% of earners. That was mentioned by a number of my hon. Friends, including my hon. Friend the Member for Gainsborough (Sir Edward Leigh), who pointed out that we are receiving more from the top 1% than the Labour party ever managed to.

It is interesting to note that the proportion of income tax contributed by the top 1% exceeded 25% in only one year during Labour’s time in office, namely 2009-10, which was a slightly strange year because a large amount of income was brought forward so that the tax could be paid at a rate of 40% rather than 50%. In that year, 26.5% of income tax was paid by the top 1%, but in the remaining years the proportion was 25% or lower. We estimate that in 2013-14, with the new lower rate of 45%, nearly 30%—to be precise, 29.8%—of income tax receipts will come from the top 1%. The problem with the 50p rate was that it was not very good at doing what a tax is supposed to do—raising revenue. That is the Labour party’s essential difficulty in advocating a 50p rate of income tax.

Treasury

Debate between Chris Evans and David Gauke

Tuesday 18th December 2012 Ministerial Corrections

[Chris Evans (Islwyn) (Lab/Co-op)]

14. What the average waiting time for calls to Her Majesty’s Revenue and Customs helplines was in (a) the last 12 months and (b) the previous 12 months.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The average waiting time for a customer calling HMRC’s helplines in the past 12 months was four minutes and 19 seconds. In the preceding 12 months, it was four minutes and 13 seconds.

[Official Report, 26 June 2012, Vol. 547, c. 153.]

An error has been identified in the oral answer given to the hon. Member for Islwyn (Chris Evans).

The correct answer should have been:

Oral Answers to Questions

Debate between Chris Evans and David Gauke

Tuesday 11th September 2012 Commons Chamber

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Government aim to provide a climate of economic stability that will benefit all businesses. That would not be possible without a credible plan to deal with Government debt, and a VAT increase is an important component of that plan.

[Chris Evans]

Since January this year, 42 retail businesses in Wales have gone to the wall. What message does the Minister have for Welsh business leaders who have called for a reduction in VAT to breath new life into the high street?

[Mr Gauke]

Retail sales growth has generally been positive over the past year. Let me underline this point: if the biggest problem faced by the economy at the moment is that we are not borrowing enough, that is, I am afraid, a very strange diagnosis.

Oral Answers to Questions

Debate between Chris Evans and David Gauke

Tuesday 26th June 2012 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

14. What the average waiting time for calls to Her Majesty’s Revenue and Customs helplines was in (a) the last 12 months and (b) the previous 12 months.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The average waiting time for a customer calling HMRC’s helplines in the past 12 months was four minutes and 19 seconds. In the preceding 12 months, it was four minutes and 13 seconds.

[Chris Evans]

A constituent of mine has had a nightmare experience trying to get through to HMRC: he phoned several times throughout the week, but never spoke to an adviser and kept getting an engaged line. His is just one of many cases involving HMRC in my constituency office at the moment. With 10,000 HMRC staff being laid off, how do the Government hope to clamp down on tax avoidance when they obviously cannot collect taxes in the first place?

[Mr Gauke]

The first point to make is that the numbers of front-line staff dealing with tax avoidance and tax evasion are increasing over the course of this Parliament, in contrast with what happened during the last Parliament. There has been improvement in contact centre performance in the number of calls that get through, but more progress is needed. HMRC is deploying staff more flexibly and conducting small-scale pilots to see whether the private sector can provide additional capacity. HMRC is determined to improve performance.