Income Tax: Top Rate

Lord Davies of Oldham Excerpts

Monday 16th March 2015 Lords Chamber

[Lord Newby]

No, my Lords, it does not. HRMC estimates that if you reduce the top tax rate from 45% to 40%, the likely cost to the Exchequer will be about £1 billion.

[Lord Davies of Oldham (Lab)]

My Lords, does the Minister not acknowledge that in fact the very wealthy have various stratagems for reducing the impact of taxation? That is why, whatever the Government do, it does not produce the resources that the nation needs. Why does the Conservative Party not drop the idea that supporting the wealthy will somehow lead to a trickle-down advantage for the rest of the community, when the disparity between the wealthy and the poorest in our society is growing wider, and why do they not address themselves to the real issue, which is that the vast majority of people in this country are poorer under this coalition?

[Lord Newby]

My Lords, I do not know which bits of that question to deal with first. However, given the time, I just point out to the noble Lord that the group of the population whose income, by percentage and absolute amount, has suffered most and which has lost the most is the top 20%. They have seen a 3% cut in their income, which is a greater cut than has been experienced by any other tranche. The noble Lord does not like it because it is an inconvenient truth, but it does not stop it being a truth.