Basic rate limit and personal allowance

Part of Finance (No. 3) Bill – in the House of Commons at 6:30 pm on 19th November 2018.

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Photo of Alex Burghart Alex Burghart Conservative, Brentwood and Ongar 6:30 pm, 19th November 2018

I imagine that they are; they have every right to be very concerned—nay, furious—about it.

Several clauses in the Finance Bill have been misrepresented. They put more money in people’s pockets and make more money available to businesses, not for the sake of some blind ideological exercise, but because Conservatives know that growth matters most to our economy. We would all like to have more money for public services today, but if we get that additional money by raising taxes, there will be less money in the economy and, ultimately, less revenue, so less money for public services. The only way to increase the size of the slice of the pie that goes to public services is by increasing the size of the pie. The only way to do that effectively is by giving people opportunities to spend more of their own money, and by giving businesses opportunities to set up, survive, grow, employ people and share wealth.

For that reason, I fully support the measures in clause 5, which provide an opportunity to take yet more people out of income tax, building on the work done by the coalition Government. To return to a point made earlier by my hon. Friend Julian Knight, it is very easy to create fiscal drag by having people pay higher taxes. Reducing those taxes reduces the drag and increases the amount of money in the economy. More people spend more money, which helps businesses to employ more people and creates a virtuous cycle from which we all benefit.