Amendment of the Law

Debate between Joan Ruddock and Stephen Williams

Wednesday 21st March 2012 Commons Chamber

[Stephen Williams (Bristol West) (LD)]

All Budgets are packages, and all of them are balancing acts, and that is particularly true of a Budget presented by a Chancellor in a coalition Government. It is fairly clear for all to see, in bold primary colours, which are the yellow and which are the blue packages in this particular Budget. What is also clear is the string that binds together this Budget and this coalition Government: reducing our deficit from the position that we inherited, where £1 in every four was being borrowed; restoring our economy to balanced and sustainable growth; restoring and maintaining confidence in the international markets; and bringing about a fair tax system that rewards work and enterprise, and taxes wealth. Labour borrowed us all into the mess that we inherited in 2010, but under the coalition Government, Britain will earn its way back to prosperity.

As Liberal Democrats in the coalition, we wanted three tax changes in this Budget. First, we wanted a fair income tax system that would lift the low-paid out of tax and bring about a tax break for middle earners. Secondly, we wanted a system that would tax accumulated and unearned wealth fairly and effectively. Thirdly, we wanted action to tackle the abuse of the tax system that was taking place through aggressive tax avoidance schemes. All three of those objectives have been met by the Chancellor’s Budget.

Two years ago, we were all about to go out on to the streets to start the general election campaign. The Liberal Democrats’ No. 1 priority at the time was to achieve in this Parliament tax-free pay for all our fellow citizens earning less than £10,000. That objective is in the coalition agreement, and significant progress has already been made towards achieving it.

[Dame Joan Ruddock]

The hon. Gentleman is part of a Government who have voted to reduce the income of the average family with children by £530 from the beginning of next month. There is no measure in the Budget that will make up for that, and frankly, people in my constituency will see it as an insult to their intelligence.

[Stephen Williams]

The right hon. Lady will hear as I make progress through my speech that working families up and down the country, with or without children, will benefit significantly from the tax changes that the Government are making.

In the current tax year, we have raised the allowance from £6,475 to £7,475, lifting 800,000 people out of the income tax net altogether and providing a £200 tax cut for every basic rate taxpayer.