Oral Answers to Questions

Debate between David Ruffley and Danny Alexander

Tuesday 10th December 2013 Commons Chamber

[Danny Alexander]

No, I do not share that analysis. It ignores the fact that increases to the personal allowance, along with many of our reforms to the welfare system, increase substantially the incentives for people to go into work. The private sector has created a net 1.4 million jobs since 2010, so there are more job opportunities to go around too.

[Mr David Ruffley (Bury St Edmunds) (Con)]

The Chancellor last week published evidence showing that his bold cuts to corporation tax more or less paid for themselves because of the extra economic activity they generated. Can a similar piece of work not be done to demonstrate that further cuts in income tax will also pay for themselves in a similar way?

[Danny Alexander]

I think that is rather a good idea and I will take it up in the Treasury.

Oral Answers to Questions

Debate between David Ruffley and Danny Alexander

Tuesday 11th December 2012 Commons Chamber

[The Chief Secretary to the Treasury (Danny Alexander)]

The hon. Gentleman will recall that the Building Schools for the Future scheme was expensive and inefficient and that we had to scrap it because it was unaffordable. It was one of the many unaffordable promises that he and his colleagues made before the election in order to get people’s hopes up, yet still the former Chief Secretary left a note stating, “There’s no money left.”

[Mr David Ruffley (Bury St Edmunds) (Con)]

It is manifestly in the interests of the British taxpayer that foreign sovereign wealth funds invest in national infrastructure projects. Will the Chief Secretary indicate what progress is being made in that respect?

[Danny Alexander]

Significant progress is being made in that respect. We have seen significant investment in Thames Water, for example, by overseas investment funds. We announced in the autumn statement some funding for junction 30 of the M25, which is part of ensuring a significant investment from people in Dubai in a major port facility near London. No doubt there will be further such announcements to make in future.

Finance (No. 4) Bill

Debate between David Ruffley and Danny Alexander

Monday 16th April 2012 Commons Chamber

[Danny Alexander]

I am glad that the hon. Gentleman at least recognises that we made clear in our election manifesto our ambition to raise the income tax personal allowance to £10,000. We have introduced the triple lock for pensions that provides for a more generous uprating system, and some 5 million pensioners pay no income tax at all. For those reasons, many pensioners will be better off.

It is right that the richest in the country contribute a fair and growing share to our collective effort to build a balanced and sustainable economy. Clause 209 increases the bank levy to 0.105% from January 2013 to offset the tax saving that the banks would otherwise have made from a reduced rate of corporation tax. That will ensure that UK banks continue to pay around £2.5 billion in this new tax each and every year, which is more than was raised in a single year by the previous Government’s one-off bank payroll tax.

Clause 211 introduces a new higher rate of stamp duty land tax of 7% on properties worth more than £2 million. That is why next year’s Finance Bill will cap the use of tax reliefs that some wealthy people currently use to reduce their income tax rate to single figures. As we made clear on page 59 of the Budget document, however, we

“will explore with philanthropists ways to ensure this new limit of uncapped reliefs will not impact significantly on charities that depend on large donations.”

Our consultation on the detail will be published in the summer.

[Mr David Ruffley (Bury St Edmunds) (Con)]

Many charities, including the Suffolk Foundation, estimate that the cap on tax reliefs will lead to a 20% reduction in their charitable donations. Will the Chief Secretary consider exempting charitable donations to UK charities? It would be comparatively inexpensive but terribly important to the charitable sector.

[Danny Alexander]

It is important that the House is clear about what is being proposed. What we are proposing is a limit, on what are currently uncapped tax reliefs, of £50,000 or a quarter of someone’s income, whichever is the higher; so someone earning £10 million a year can still receive tax relief on donations of £2.5 million to charity each and every year. However, as I say, we will discuss this with philanthropists and charities—indeed, those discussions are ongoing. Some features of the American system, for example, may be attractive, which we will certainly examine and consider as part of that process.

The basic principle that the wealthiest in the land should pay a fair proportion of their income in income tax must be absolutely right, not least because last week we published data showing that last year some of the wealthiest people in the country had reduced their tax bills to below the basic rate of income tax. That is the system that was in place when Labour was in power. I think Opposition Members should have a bit of humility about that, because it means that some millionaires are paying a lower rate of income tax than people earning £20,000 a year. That is why it is fair that we cap tax reliefs, and, in the same way, it is right that we cap benefits. It is right and proper to ensure that the wealthiest in the country should pay a fair share of their income in tax, and that is exactly what we will do.