Wealth

Lord Bilimoria Excerpts

Monday 5th July 2010 Lords Chamber

[Lord Sassoon]

I am grateful to the noble Lord for asking what action was taken during the period of the Labour Government to reduce wealth inequality, because I can give him the statistics. The HMRC survey showed that the top 10 per cent of households in 1997 owned 54 per cent of the wealth; in 2005, they still owned 54 per cent of the wealth. The Gini coefficient, which your Lordships will be aware measures the dispersal of wealth, had risen marginally from 69 per cent in 1997 to 70 per cent in 2005. That probably shows that whatever action was taken had no appreciable effect.

[Lord Bilimoria]

My Lords, does the Minister agree that the question should be not how much wealth does the richest 10 per cent hold, but how much wealth does the richest 10 per cent generate for this economy? What are the Government doing about the worry of driving away some of the most talented people through the 50 per cent rate of tax, the non-dom levy and increased CGT? Surely we should be attracting more wealth creation. On the other hand, with regard to the question before about the previous Government and reducing child poverty, is it not shocking that we should have child poverty in one of the wealthiest nations in the world?

[Lord Sassoon]

My Lords, I am grateful to the noble Lord, Lord Bilimoria, because he enables me to say yet again how important it is that wealth generation is created and that the balance of the economy is switched from overdependence on the public sector and debt to dependence on the private sector and equity. That is why he did not mention—but I will—the reduction in corporation tax, the fact that CGT did not go up anything like as much as people had feared and a number of other measures in the Budget. He is right to draw attention to child poverty because the previous Government failed to meet their target of halving it by 2010.