Clause 3
Finance Bill
11:45 am
David Gauke (Shadow Minister, Treasury; South West Hertfordshire, Conservative)
The hon. Gentleman makes a fair point. It is an important technical point and one which the new clause does not fully address. We recognise that there will be a tapering system. Our policy is aimed at helping those who benefit from the basic rate. We think that these amendments help to achieve that.
I note the Minister’s earlier points about the benefit of raising personal allowances and taking pensioners out of the tax system, but our proposal does not result in some of the difficulties of pensioners having to claim back taxes in certain circumstances. Clearly it helps to take pensioners out of the tax system. I do not intend to run over all the arguments about encouraging saving in order to provide resilience for individuals, to encourage independence and perhaps even to provide stability within our banking system, as I have made those points already. Equally this group has been hit hard by the fall in interest rates in recent months. This must be seen as part of the package to help savers which I addressed earlier. We believe that this is a useful policy. It will help those who have been unfairly affected by the fall in interest rates. An increase in personal allowances in this area is a simple way of redressing that.