Finance Bill

Debate between Peter Grant and Anthony Browne

Committee stage
Wednesday 30th November 2022 Commons Chamber

[Anthony Browne]

I am well aware of how fiscal drag works. I have been studying it, reporting on it and commenting on it for about 20 years. My point was that, as the amendment is worded, the person would have become liable to pay the base rate of income tax when they were not previously so liable. If they are not liable now, they will not become liable as a result of this Bill. The hon. Lady could have changed the wording of the amendment—she would need to go to lawyers to work out the wording—but, as it stands, literally no one falls into that category. The one category in which people could end up in higher tax bands as a result of the Bill is not actually mentioned, which is the lowering of the threshold for the additional rate of tax from £150,000 a year to £125,000 a year. So for example, if a person was earning £130,000 a year, they would not be liable for the additional rate of income tax—the 45p rate—now, but they will be as a result of the Bill. However, the hon. Lady’s amendment does not mention that; it mentions the standard rate and the lower rate, for which the thresholds are kept stable.

New clause 8 has not been selected, but the hon. Members for Ealing North (James Murray) and for Gordon (Richard Thomson) both talked about non-doms. I just point out that there is a lot about non-doms that I would tidy up. It is clearly not a perfect system, and I do not think that anybody would defend it. None the less, it was there throughout the time of the last Labour Government. They did many reviews on it—I remember those reviews—and they sort of tinkered with it a little bit, but fundamentally left it the same. They agreed with the arguments currently put out by the Government that it is an overall net gain for the UK economy and for the UK taxpayer.

[Peter Grant (Glenrothes) (SNP)]

I am wondering whether the teddy should be moved on to the Front Bench. It could become one of the most effective Members of the present Cabinet.

The hon. Gentleman mentioned his belief in tax transparency, which is clearly something that we would all welcome. In his autumn statement, the Chancellor made a great deal of the fact that it would mean that somebody working full time on a minimum wage would get a pay rise of about £1,900. He did not mention that the Treasury would then take back almost £500 of that because of the increased tax they would have to pay. Does he believe that it would have been more transparent for the Chancellor to admit how much additional tax somebody on a minimum wage would be paying as a result of there being no increase in the tax bands in this Finance Bill?