Clause 1 — Charge for 2012-13 and rates for 2012-13 and subsequent tax years

Part of Diabetes Prevention (Soft Drinks) – in the House of Commons at 3:30 pm on 18 April 2012.

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Photo of David Gauke David Gauke The Exchequer Secretary 3:30, 18 April 2012

The hon. Gentleman cites the report; let me give him the full quote. On page 2, the summary gives the estimate that the yield from the 50p rate could be

“around £1 billion or less…and that it is quite possible that it could be negative.”

We need to compare that with the previous Government’s estimate of a yield of £2.6 billion—[ Interruption. ] Ah! Owen Smith says that it was £1.3 billion in the first year. Let me explain why the figure was £1.3 billion in the first year. He is presenting that as a great triumph. Most of the money that comes in from wealthy individuals comes in through the self-assessment system, and most of the money raised from the top rate will be collected in the year after the rate is introduced. Only a certain proportion will come in through PAYE. The reason the figure was £1.3 billion in the first year was purely one of cash flow. If the hon. Gentleman is claiming that the revenue was only ever expected to be £1.3 billion, that is not a fair representation of the previous Government’s estimate, which was of a steady rate of £2.6 billion and rising.