Finance (No. 2) Bill

Part of Bill Presented – in the House of Commons at 2:12 pm on 1st April 2014.

Alert me about debates like this

Photo of Chris Leslie Chris Leslie Shadow Chief Secretary to the Treasury 2:12 pm, 1st April 2014

I do not think it helps with social cohesion to move from the 50p to the 45p rate. That sends a very bad signal, and I know that Members on the Government Benches will feel that in their constituencies, especially when the Government are jacking up taxes and reducing tax credits and other help for some of the poorest in society, while giving that very generous tax cut—typically £107,000—to the average millionaire at the top of the scale. I do not think a 50p rate is unreasonable.

It is unreasonable for Government Members to say that a 50p rate does not raise any money—“we cannot possibly do it”. If it is telegraphed to that set of high earners at the point at which a 50p rate comes into effect that it will be going in a year or two anyway, of course they can stave off the point at which they draw down their dividend from their personal service company. Everybody knows how they managed to avoid paying that 50p rate. They waited until the new tax year ticked over, then they paid the lower rate. It was very simple, which is why in the statistics we suddenly saw bonus payments go through the roof, sky high, at the point when the 50p rate fell to the 45p rate. We should have been allowed a proper assessment of what happened at that point.