Oral Answers to Questions

Debate between David Gauke and Graeme Morrice

Tuesday 24th April 2012 Commons Chamber

[Graeme Morrice (Livingston) (Lab)]

8. What recent assessment he has made of the rate of income tax paid by those earning over £150,000 per year.

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

The Government are committed to ensuring that everyone pays their fair share of tax. The percentage of total income tax paid by the top 1% will be more than 27% in 2012-13 and in subsequent years, compared with an average of less than 23% between 1997 and 2010. Budget 2012 announced a package of measures to ensure that those on the highest incomes contribute more. This includes a cap on previously uncapped income tax reliefs, which will increase effective tax rates.

[Graeme Morrice]

The Prime Minister claimed in the House last week that the 50p top rate of tax had raised barely anything at all, yet the HMRC document sets out a figure of more than £1 billion, and the Minister confirmed in the House on the same day that it had raised £700 million. Should not the Prime Minister come to the House and set the record straight?

[Mr Gauke]

No, the cut from 50p to 45p will have a direct cost in reduced income tax of about £100 million. As it happens, the indirect benefit of additional indirect taxes is likely to exceed that number.