Clause 1
Finance Bill
11:30 am
Jane Kennedy (Financial Secretary, HM Treasury; Liverpool, Wavertree, Labour)
The hon. Gentleman, in answering questions around his proposal, indicated that even if it were implemented in the way that he suggests, it would raise about £7 billion—I think that that is the figure he quotes. That still leaves a very large gap in the resources that he says need to be raised to finance a reduction in the basic rate of income tax to 16 per cent.
If I, as a higher-rate taxpayer, put £2,000, for example, into my pension fund, the Government, effectively, tops that up by about £800, recognising that I make contributions from taxed income. Pension itself is then taxed when it is drawn. The hon. Member for Taunton and his party have not really thought through what—it is becoming clear—is a serious proposal.