Oral Answers to Questions

Graeme Morrice Excerpts

Tuesday 24th April 2012 Commons Chamber

[Danny Alexander]

In that case, the hon. Gentleman ought also to welcome the substantial investment, for example, in the northern hub rail project. He ought to welcome the substantial investment in the electrification of the trans-Pennine railway. He ought to welcome the substantial investment in the capital infrastructure around ports to enable the north and the north-east of England to benefit, particularly from the investment in renewables that we will see over the coming years. A fair picture would represent those things too.

[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.