Oral Answers to Questions

Gregg McClymont Excerpts

Tuesday 12th March 2013 Commons Chamber

[Greg Clark]

Yes. By next month it will be worth £600 a year for every basic rate taxpayer, which is an enormous increase. For someone on median earnings, it is equivalent to a pay rise of 4.5%. I would have thought that the shadow Chancellor, who professes to be interested in helping the low-paid, would endorse the policy.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

12. What estimate he has made of what the annual value of his planned reduction in the additional rate of income tax to 45% would be to a person earning £1 million a year.

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

Owing to the significant behavioural responses to changes in marginal tax rates at high levels of income, the annual value of changing the additional rate of tax would not reflect the actual Exchequer impacts of the change. HMRC’s report “The Exchequer effects of the 50 per cent additional rate of income tax”, which was published alongside the 2012 Budget, set out that behavioural response in detail.

[Gregg McClymont]

Well, that was very clear, Mr Speaker. The answer, of course, is £40,000 a year. Why is a £40,000 a year tax cut for millionaires this Government’s priority?

[Mr Gauke]

The purpose of income tax is to raise money to fund public services. The 50p rate of income tax did not raise money to fund public services, so we have got rid of it.

--- Later in debate ---

[Mr George Osborne]

We are raising more in bank taxes every year of this Parliament than the previous Government raised in any one year during their time in office. My hon. Friend is right; those revenues help to support public services and deal with the deficit. We also have a better-regulated banking system, and with the arrival in April of the Bank of England’s new role as prudential regulator, and the Financial Services (Banking Reform) Bill currently before Parliament, we are putting right all that went wrong in the banking system.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

T3. Did the Business Secretary let the cat out of the bag yesterday? When asked on the “Today” programme whether his call for investment in infrastructure to kick-start the recovery would mean more borrowing, he replied:“Well we are already borrowing more”.

[Mr Osborne]

We are increasing capital spending more than in the plans we inherited from the Labour Government. This Government are spending more on roads than the previous Government did and, of course, the deficit has come down by 25%.