Finance (No. 4) Bill

Debate between Owen Smith and Nadhim Zahawi

Wednesday 18th April 2012 Commons Chamber

[Owen Smith]

I am tempted to say to my hon. Friend that the golden phrase “expansionary fiscal contraction” tells us all that we need to know about the ability of those on the Treasury Bench. Expansionary fiscal contraction! That is working really well, isn’t it? It is going splendidly.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

If we set aside the shadow Minister’s amendment, which would leave us with a 40p top rate of tax—[Interruption.] Let us set that aside for the moment. My question to him is this: would he reverse the decision on the 50p tax rate if he were in office? A yes or no is all I require.

[Owen Smith]

Yes. Right now, we would not have cut the 50p rate in this Parliament. Full stop. End of. Thank you very much.

[Nadhim Zahawi]

rose—

[Owen Smith]

No, the hon. Gentleman has just heard my answer. Throughout this Parliament, we would not have done that. No tax rate is set in stone for ever, but the question of whether we would reverse that decision is irrelevant because we are not in government. You lot are, and you cut it, but that would not have been our priority. Neither was it the priority of the present Chancellor just 18 months ago. When we introduced the 50p rate, we said that we wanted those with the broadest shoulders to pay the most, in order to deal with the global turmoil—[Interruption.] Members should just listen for a moment. When he was shadow Chancellor, the present Chancellor said that he agreed with us. In October 2009, he said that

“we could not even think of abolishing the 50p rate on the rich while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs. I think we can all agree that would be grossly unfair.”

I still agree with that.