Income Tax

Debate between Frank Dobson and Lord Bruce of Bennachie

Wednesday 5th November 2014 Commons Chamber

[Sir Malcolm Bruce (Gordon) (LD)]

The motion seems to me a distraction for a party that has no credible economic policy and wants to draw attention away from that fact. We, as Liberal Democrats, voted for the reduction from 50p to 45p, but on the conditions which we negotiated within the Government, that rich people would pay substantially more in taxes as a direct result. That is precisely what has happened. It ill behoves the Labour party to latch on to a headline figure when its analysis does not stand up. There has been talk about the low wage, low tax economy, but I happen to remember the first two years of the Blair Government, when sticking to Conservative party spending plans meant tens of thousands of experienced doctors, teachers, nurses and public sector workers were thrown out of work by the Labour Government and then had to be re-employed subsequently at much higher cost.

[Frank Dobson]

Will the right hon. Gentleman give way?

[Sir Malcolm Bruce]

No, I will not at this time, and I want to let other hon. Members in. That is what happened and I had the debate then.

The point I want to make is that the Labour party has never yet had the will to say sorry to the British people for what it bequeathed to us. The fact is that the economy collapsed by 7% in a single year. It has been a huge heavy lifting task for this Government to rebuild the economy to the point where we now have a strong and balanced recovery. My party’s objective is precisely to have a stronger economy and a fairer society. We believe we have made a very significant contribution to achieving that. In particular, I am slightly surprised at the disdainful way Labour Members treat the raising of the tax threshold, which has been hugely beneficial to many people on low earnings by taking them out of tax.

I have to say that I am astonished that the motion refers to the 10p tax, which has been nothing but a source of political embarrassment and division for the Labour party ever since it was thought up, invented and abolished by the Labour party. It is not clear to me whether Labour Members want to replace the 0p rate by a 10p rate, which of course means that what we are talking about is a tax increase, or whether they will follow the advice of the IFS, which says that raising the tax threshold is a much more efficient way of delivering benefits to poor people than a 10p rate. That is why we have supported raising the threshold and delivered it.