Finance (No. 4) Bill

Lindsay Hoyle Excerpts

Wednesday 18th April 2012 Commons Chamber

[Owen Smith (Pontypridd) (Lab)]

I beg to move amendment 1, page 2, line 4, leave out paragraph (c).

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

Amendment 76, page 2, line 4, at end insert—

‘(1) The Treasury shall, within two months of Royal Assent of this Act, publish a report on the additional rate of income tax.

(2) This report shall make recommendations on—

(a) preventing the tax-avoidance measures employed by individuals to avoid making payments at the additional rate of income tax, and

(b) the impact upon Treasury revenue of setting the additional rate to—

(i) 50 per cent and

(ii) 45 per cent in the tax year 2013-14.’.

Amendment 7, page 2, line 5, leave out subsections (3) to (6).

Amendment 62, page 2, line 22, at end add—

‘(7) The Treasury shall, within two months of Royal Assent, make an assessment of the relative administrative costs of—

(a) making an additional charge to income tax payable by all individuals with an adjusted net income above a certain amount; and

(b) the measures in section 8 of, and Schedule 1 to this Act.’.

Clause stand part.

[Owen Smith]

It is a great pleasure to be under your chairmanship, Mr Hoyle.

The legislation we deal with in this House can sometimes appear rather obscure or require a significant amount of interpretation. For financial legislation that is often true in spades, but not so with this Bill, because what do we have, straight off the bat, on page 1, in part 1, chapter 1, clause 1? A tax cut for millionaires—£40,000 for 14,000 millionaires, signed away in one short line, in subsection (2)(c), which cuts the additional top rate of tax from 50p to 45p. Let me be clear: our amendment would get rid of that provision. It would do what we as the Opposition are able to do and strike out from the Bill the change from 50p to 45p. Let there be no doubt whatever: we will be voting to remove paragraph (c) later today.

--- Later in debate ---

[Owen Smith]

Is the hon. Gentleman about to—

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. I am sure that the hon. Member for Spelthorne (Kwasi Kwarteng) has only just walked into the Chamber. He cannot have picked up the debate quite this quickly. He might need a little more time to listen before he intervenes.

[Owen Smith]

We should give the hon. Gentleman time to warm up, but if he wants to intervene to tell me where in the HMRC report we can find a definitive set of data on the impact on competitiveness of the various rates of tax, I will gladly sit down and wait for him to do so.

--- Later in debate ---

[Karl MᶜCartney]

Later, I will be as generous as the hon. Gentleman was if hon. Members will let me get through some of my speech. I certainly will not speak for as long as he did.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. I think we are having a few too many interventions. I say to the hon. Member for Rhondda (Chris Bryant) that although the hon. Member for Lincoln (Karl MᶜCartney) might have broken his leg, he obviously did not break his tongue, which he ought perhaps to hold a little more.

[Karl MᶜCartney]

Thank you, Mr Hoyle for letting me continue. I feel I ought to correct what might be an untruth: I did not break the leg of the hon. Member for Rhondda. I gave him quite a good pass—not even a hospital pass—on the rugby field and the two large gentlemen who were about to tackle me then tackled him.

The independent Office for Budget Responsibility agrees that the 50p rate raises only a fraction of what was supposedly intended. So, one of my questions to the Chancellor and his Ministers is whether they know of any reason why any Member would disagree with the highly respected OBR other than for disingenuous political gain.

The 50p rate is bad economics. The previous Labour Government’s Chancellors and Prime Ministers and the Labour party’s current shadow Chancellor, the right hon. Member for Morley and Outwood (Ed Balls), are well aware of that privately but cannot bring themselves to acknowledge it publicly. Ultimately, it is the highest tax rate in the G20. Our Government are clear where they stand on the 50p tax rate: it has not raised anywhere near the revenue expected as many individuals cleverly engaged their own or their accountants’ knowledge to bypass the rate and lower their tax bills. The Government have now sent out a clear signal to the international community that Britain is open for business and will no longer have the highest tax rate in the G20. The same clear signal cannot be said to be coming from those on the Opposition Benches.