Geraint Davies: Will the Minister take this opportunity to confess that the reason why the Treasury predicts less will be generated by the 50p rate in the one year of its

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operation than the 45p rate is that he knows, as I do, that millionaires can move their money between tax years? As the rate only runs for one year, they will move their money to the lower tax year. He would raise more money if he kept the 50p going. It is a con for his mates.

Mr Gauke: There are two points. It is correct that the wealthy are often able to move income from one year to another, but the conclusion that HMRC and the Office for Budget Responsibility reached is that even taking into account the forestalling effect, the behavioural consequences of the 50p rate were so significant that it barely raised any revenue. That is the reality. It even takes into account the hon. Gentleman’s point about forestalling. That approach has been confirmed by the OBR. The 50p rate failed.

Anas Sarwar (Glasgow Central) (Lab): The message that the Government have repeated over and over again is that we are all in this together. Take the example of families in my constituency who live just one mile apart. One has been handed a tax cut as a result of the scrapping of the 50p tax rate. One mile in the other direction families will be handed a food parcel. Does the Minister think that is fair?

Mr Gauke: Let us look at what was in the last Budget in respect of stamp duty and the cap on reliefs. We could also look at what we have done with regard to capital gains tax. The independent Institute for Fiscal Studies has made it clear that the top 20% are affected most by the fiscal consolidation policies that have been pursued in this Parliament. Those with broadest shoulders are bearing the greatest burden. However, we have an enormous deficit that we have to get down—a deficit that we inherited from the Opposition.

Mel Stride (Central Devon) (Con): Will my hon. Friend confirm that the highest rate of income tax currently under this Government is higher than was the case in the previous Government’s 13 years, all bar the last couple of weeks?

Mr Gauke: My hon. Friend is right. The Labour Government were in office for 4,758 days. For all but 36 of those days, the highest rate of income tax was at 40p. Then it moved to 50p. There is a good question to ask the Opposition about why they kept it at 40p for so long. Why did they leave it until the fag-end of their Government, when it was clear that they would not be in government any more? The reason is that the 50p rate, predictably enough, did not do what it was supposed to do. It did not raise revenue, and an income tax that does not raise revenue is not something that a sensible Government would persevere with.

I turn to the mansion tax.

Geraint Davies: Will the Minister give way?

Mr Gauke: No. I shall make a little progress, devastating though the hon. Gentleman’s interventions so often are.

We have always been quite clear that the proposed mansion tax is an issue on which the two parties in the coalition have differing views. Our Liberal Democrat colleagues have supported the principle for some time. I am sure that the Under-Secretary of State for Communities

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and Local Government, my right hon. Friend the Member for Bath (Mr Foster) will make that clear when he winds up the debate. In contrast, Conservative Ministers have very real concerns over such a proposal. We have concerns that a third of the properties in London worth more than £2 million have been in the same ownership for over 10 years, and that a mansion tax could hit asset-rich but potentially income-poor households, a point made by my hon. Friend the Member for Battersea (Jane Ellison).

Dame Angela Watkinson: My hon. Friend will know that £2 million does not buy a mansion in London, and certainly not in outer London, where I have a number of constituents who moved out from inner London decades ago. Their homes have increased in value beyond their wildest dreams over a very long period, but they are in fact cash-poor, quite often living on a modest pension. The thought of paying very large amounts of tax every year for the privilege of owning a home that they have had for many years would be extremely frightening. Can the Minister think of any practical way that an elderly person in that position could possibly pay that tax?

Mr Gauke: I noticed that that very point was one that the hon. Member for Nottingham East seemed to struggling with. He seemed to suggest that there were ways in which the Opposition would address that. I am not sure whether that was included in the costings they have produced. There is an issue for the asset-rich, cash-poor which would need to be addressed in the design and would obviously have an impact on the costing.

Sheila Gilmore (Edinburgh East) (Lab): Would the Minister suggest to people in those circumstances that they might want to take a lodger, just as it has been suggested to my 60-year-old constituent that the answer to the bedroom tax is to take a lodger?

Mr Gauke: I am not going to debate at length the spare-room subsidy, which is an area of public spending constraint that we need to engage in. There is a genuine issue in respect of the asset-rich, cash-poor that the hon. Member for Nottingham East appeared to recognise and which would have to be addressed.

The mansion tax would be administratively burdensome for HMRC to operate, not to mention intrusive for the person having their home inspected. We would have concerns that in Labour’s hands, the starting level for such a tax would not stay at £2 million for very long. What began as a mansion tax would soon become a homes tax. To coin a phrase, it would become a tax for the many, not for the few.

Chris Leslie: I am surprised the Minister thinks that “the many” own properties worth £2 million and above. I wanted to ask him about the Treasury’s own proposition that residential properties of £2 million and above, albeit owned by a company, should have an annual charge based on a self-assessed valuation, with a banding process. Is he saying that his own policy is administratively burdensome?

Mr Gauke: Let us be clear. One of the weaknesses in the tax system that we inherited was the fact that people were able to walk around the paying of stamp duty.

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On very valuable properties, it was all too easy for people to arrange their affairs thorough corporate vehicles and not pay stamp duty. In the last Budget this Government introduced measures that will deal with that enveloping and deal with one of the unfairnesses in our tax system. One of the ways in which we are going to do that, as well as a high stamp duty charge for properties held in corporate vehicles, is to bring in an annual residential property tax. That is focused only on properties worth more than £2 million held by a corporate vehicle. It would apply to only 6,000 properties, we estimate. It is a very narrowly focused policy that will enable us to deal with an area of avoidance that was allowed to carry on for far too long under Labour.

Caroline Lucas: As a tax that is much harder to evade or avoid, there is the land value tax. That is supported by one half of the coalition and by the OECD and the IMF. The IFS has said that the case for a land value tax is overwhelming because it is much fairer. Given that that is the case, can the Minister explain why his Government will not even do some basic research into it, as my private Member’s Bill requested?

Mr Gauke: We are left with the same issues of complexity of valuation across the board, and the issues of the asset-rich, cash poor. That is why my part of the coalition is not keen to proceed with that matter, but it is worth pointing out that we are raising more money from property. There is a stamp duty land tax of 7% on residential properties costing £2 million or more, a policy that is easy to administer and will not impact on existing home owners.

On the mansion tax, we have made no secret of the fact that the two parties disagree. If we did not disagree on some things, we would be one party, not two. But in the circumstances that we are in, it has been perfectly possible for two parties to work together in a sensible and mature way and to reach agreement on a host of measures that have made our tax system fairer, easier to understand and competitive. We heard much from the hon. Member for Nottingham East to the effect that we should do more to help low-income workers. May I just remind him and the House of the progress that we have made in raising the personal allowance? In 2010, someone on £6,500 was paying income tax at 20%. From next month, someone has to earn £9,440 before paying any income tax at all. Our measures on the personal allowance have provided a huge tax cut for millions of people and will take more than 2.2 million of the lowest earners out of income tax altogether. In fact, over the course of this Parliament, someone working full time on the national minimum wage will have seen their income tax bill cut in half.

Let us contrast our record with that of our predecessors. Let us remember that when the right hon. and absent Member for Kirkcaldy and Cowdenbeath (Mr Brown) did his last Budget, rather than cut taxes for the working poor, he increased them. People talk about the scrapping of the 10p rate, but Labour did not scrap it, they doubled it. They turned it into a 20p rate. For example, someone earning £9,000 a year in 2007 would have heard a Labour Chancellor stand up and announce that a Labour Government were going to increase their income tax bill by more than £200. Last year, someone on £9,000 a year would have heard a Conservative

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Chancellor stand up and announce that a coalition Government were going to take them out of income tax altogether. Our constituents on £9,000 a year will soon be paying no income tax at all, saving more than £500 since the coalition came to power. Labour turned a 10p rate of income tax into a 20p rate. This coalition has turned a 20p rate into a 0p rate.

Mr Russell Brown (Dumfries and Galloway) (Lab): Will the Minister remind the House what he did with the personal allowance for pensioners? Am I not correct in saying that he froze that?

Mr Gauke: There is no particularly sensible reason why there should be a different personal allowance for someone who is 64, compared with 65 or 75. It is clearly a simpler and, I believe, fairer system that one personal allowance should apply to everybody. That was never an option available to the Labour party because the main personal allowance for someone under the age of 65 was so low. We have been able to increase it substantially so that one personal allowance can apply to everybody. That is a simpler and fairer way to deal with that issue. At the same time, we have increased pensions, thanks to the triple lock guarantee, by much more than we would have done if we had stuck with the plans that we inherited. Last year, pensioners saw their biggest increase in the state pension.

Mr Gibb: While my hon. Friend is on the subject of the last Labour Government, he will recall that in 2009-10, the last financial year of the last Labour Government, expenditure exceeded income by £159 billion, equal to 11% of the whole country’s income. Since he has been a Minister at the Treasury, have civil servants explained to him why that was allowed to happen, virtually bankrupting this country?

Mr Gauke: My hon. Friend makes a very good point. There is no explanation that civil servants can give for that. An explanation and an apology are due from the Opposition, but we await either of those. I think that they persist in the view that there was no structural deficit even before the crash—

Chris Leslie rose

Mr Gauke: If we are to have confirmation that there was a structural deficit before the financial crash, I will happily give way to the hon. Gentleman.

Chris Leslie: There was certainly a global financial crisis. But can the Minister confirm that under the current Chancellor of the Exchequer, national debt has risen from £811 billion to £1.111 trillion? Has debt risen by that much—yes or no?

Mr Gauke: Debt is the accumulation of deficits. We inherited the largest deficit in our peacetime history, and every measure that we have taken to reduce that deficit the Opposition have opposed, and then they complain that debt is rising. That is the most absurd position. We are criticised for not borrowing enough, and then we are criticised for our debt going up. There is no consistency or credibility in the Opposition’s position,

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just as there was no credibility or consistency in their treatment of low-paid workers. In government, they raised the rate of income tax; in opposition, they make promises that they will cut it. When we remember the reality, why should those on low incomes ever trust Labour again?

Mr Alan Reid (Argyll and Bute) (LD): In fairness of taxation, another area where this Government have done a great job is on fuel duty. The fuel duty is now 10p a litre lower on the mainland and 15p a litre lower on islands than it would have been if the Labour party had still been in power. I hope that my hon. Friend will continue that good work and that in the Budget there will be an announcement that the September fuel duty increase inherited from Labour will not go ahead.

Mr Gauke: I will take that as a Budget representation. It is perhaps worth pointing out that there was a measure that the previous Labour Government had to reduce the deficit, which was substantial increases in fuel duty over the course of this Parliament. That is a measure that we have been able to stop, and quite right too.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): Will the Minister explain why four out of five people feel that austerity is not working? Is it related to the downgrading of the economy yet again for 2013? Is it the shrinking of the economy in the last quarter of last year by 0.9%? Or is it that the OBR had to call the Prime Minister to task and give him an economics lesson?

Mr Gauke: This is a difficult time for all major economies, and the UK is no exception, but matters would be much worse if we were to abandon our desire to bring some control to the public finances. We must ensure that there is the political will to deal with the public finances, and that is what this Government will continue to demonstrate. The approach of ignoring the deficit, believing that this is all an issue that can be addressed at some future time, is economically irresponsible and unfair on future generations who will face the bill that they will have to pick up because we failed to address those problems now.

Geraint Davies: Is this not also about fairness? For instance, while the threshold changes that he has mentioned of £3,000, which deliver a saving of £11.50 a week to taxpayers, cost £9 billion, he will save half a billion pounds from inflicting that £11.50 on people for the empty bedroom tax. With a small amount of the money used to raise the tax threshold, he could have alleviated that for the very poorest. Is not this about values and not inflicting the most hardship on the most poor while giving a bung to the voters?

Mr Gauke: I take it from what the hon. Gentleman says that rather than raise the personal allowance, he would prefer us to spend more on the welfare bill. If that is the hon. Gentleman’s position, fair enough, but I do not agree. Raising the personal allowance, taking people out of income tax, and making sure that work pays, are all things that a sensible Government should do, and I am delighted that this coalition Government are able to do that.

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I come now to the taxation of those on highest incomes, on which we have already touched. The top 1% of taxpayers, those with incomes of over £150,000 a year, will pay more than a quarter of all income tax, while the top 5% of taxpayers, those with income of £68,000 or more, will pay nearly half of income tax. We agree that it is important that we create a tax system that ensures that those who earn the most contribute the most, but it is also important that we create a tax system that works. Among other things, that means a tax system that does not damage our economy by undermining our international competitiveness.

The Government inherited a top rate of tax at 50p, a rate that our predecessors, who this afternoon have painted themselves as the party of taxing the rich more, had put in place for just 36 of their 4,758 days in power. The rate that they left us with was the highest top rate among major economies. The last Labour Chancellor had made it clear that it was temporary. It was also very clear that it was having an immediate impact on our competitiveness.

Let me say something that I hope is not controversial: the principal purpose of income tax is to raise revenue. So we commissioned HMRC to analyse just how effective the 50p rate was in raising revenue.

That HMRC report, laid before the House, set out thorough and compelling evidence on the impact of the 50p rate. It showed that the rate was uncompetitive, distortive and inefficient. Not only did it not raise much revenue, but it could even have cost the Exchequer money when the indirect impacts on other taxes were taken into account. This Government were not prepared to maintain a rate of income tax that was both ineffective at raising money and that left us with the highest statutory rate of income tax in the G20, so we acted, in the interests of the country, and the top rate of tax will fall to 45p from April this year. This will see our top rate of tax drop below that of Australia, Germany, Japan and Canada, which will send a signal to businesses taking decisions on investment and location that the UK is a competitive environment.

Rehman Chishti (Gillingham and Rainham) (Con): Has the Minister seen the KPMG report that states that Britain’s competitiveness is better than that of Switzerland and the United States and that that is a consequence of the measures taken by the Government?

Mr Gauke: My hon. Friend is absolutely right to raise that point in the context of the changes we have made to our corporate tax system. In 2009 KPMG commissioned a survey of tax professionals, asking them to name the three most competitive countries. The UK was nominated by just 16% of respondents. In 2012 KPMG undertook the same survey and the UK was nominated by 72% of respondents. That is a dramatic change, which we are proud of, and it will help our economy grow. We have also had the courage to reduce the 50p rate, which will help our competitiveness, too.

Andrew George (St Ives) (LD): One thing we do know is that mansions cannot emigrate if the tax rate goes up. Earlier my hon. Friend the Minister said that the problem with the mansion tax is that it becomes a home tax. Does he agree that the council tax is also a home tax, and may I understand from what he has been saying

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that the Conservatives are coming round to the Liberal Democrat view that we should consider introducing a local income tax as an alternative for financing local authorities?

Mr Gauke: No, I think my hon. Friend would be wrong to reach that conclusion from what I have said. There is an interesting debate on the balance between property and income taxes, however, and I note his suggestion in that context.

May I now return to the topic of the 50p rate, as I know the hon. Member for Nottingham East likes to focus on it? The Opposition may think that in this day and age 50p is the least the wealthy should pay in income tax. I want to put to them the question raised earlier by my hon. Friend the Member for West Worcestershire (Harriett Baldwin). In less than four weeks the 50p rate will have gone. The additional rate will be 45p. Will Labour seek to reverse that? I am happy to take an intervention on this point. Will Labour seek to reverse that after the next election?

Chris Leslie: The Minister is asking the Opposition what is going to happen in two years’ time, but can he tell us what will happen in next week’s Budget?

Mr Gauke: That is very amusing, but of course I am not going to do so. I am fairly confident, however, that at the next general election the Conservative party will not be advocating a 50p rate of income tax. The hon. Gentleman is calling for a 50p rate of income tax, however. He will not tell us why. He is now saying, “Well, we don’t know what the economic circumstances will be.” That is fair enough, but does he think that his party will make a manifesto commitment at the next general election to introduce a mansions tax? Is that a commitment? I am happy to give way again.

Chris Leslie: It is very simple: now, in 2013, we can see the deficit rising and getting worse and we can see borrowing increasing, growth flat-lining and living standards falling, and the Minister is asking us to predict what we are going to do in two years’ time. How on earth do we know what other horrors are in next week’s Budget box or, heaven forfend, in the spending review of 26 June? Can he tell us what is in that spending review?

Mr Gauke: This is starting to get interesting, because we have now learned that the Labour party has moved a motion trying to persuade Liberal Democrats to vote in support of a mansion tax, yet Labour will not confirm whether it thinks a mansion tax is a sensible policy for the next Parliament. The position of the Liberal Democrats is clear and the position of the Conservatives is clear; what is not clear is whether the Labour party, after all, supports a mansion tax. Will it be in its manifesto? That is a perfectly clear question.

Debbie Abrahams rose

Mr Gauke: I will give way to the hon. Lady, and she can tell us whether she thinks that ought to be in the manifesto.

Debbie Abrahams: The Minister is being very generous in giving way, but I want to ask him what his Government are doing. I tabled a written parliamentary question to

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his Department asking about the average tax rates for different groups of people, and he may be astounded to know—as I am sure many of my constituents in Oldham will be—that 6% of people on incomes over £10 million pay under 10% income tax. What is he doing to address that inequity?

Mr Gauke: That is exactly why in the last Budget this Government brought in a cap on reliefs preventing the wealthy from driving down their tax rate to such levels—something the Labour party never did in 13 years in government. I note, however, that I get no answers to my question.

Let us be clear: we hear lots of complaints about the 50p rate being reduced to 45p, but we get no indication as to whether the Labour party would or would not reverse that if it were to win the next election. I can only assume that that is because deep down it knows that campaigning on 50p might look good on a leaflet but is lousy for the economy; after all, that seemed to be Labour’s approach when it was in government. We have also learned this afternoon that the Labour party is not committed to a mansion tax in the next Parliament, after all. So what do we have? We have opportunism on the 50p rate and opportunism on the mansion tax.

Several hon. Members rose

Mr Gauke: I am going to press on.

This is what we have seen from the Labour party, therefore: we have a party that increases the tax rates on the low-paid and then lectures a Government who take the low-paid out of income tax; we have a party that is in uproar at our reducing the additional rate of income tax to 45p but that will not promise to reverse it; and we have a party that did little, or nothing, to tax expensive properties more now being converted to a mansion tax for the purposes of this afternoon’s vote for transparently political reasons, but refusing to confirm that it will be their policy at the next election. That is pathetic. It is insincere, it lacks any semblance of credibility, and it deserves to be defeated. I urge my hon. Friends to defeat the motion and support the amendment.

Several hon. Members rose

Mr Deputy Speaker (Mr Nigel Evans): Order. There is to be a 10-minute limit on Back-Bench contributions with the usual injury time for two interventions.

1.57 pm

Geraint Davies (Swansea West) (Lab/Co-op): What a load of codswallop we have been listening to since the Minister got up on his hind legs! Obviously, this motion is setting out a direction of travel. We are saying that those with the broadest shoulders should take the biggest load and the poorest should not pay the cost of the bankers’ recklessness.

The myth that is habitually recited by Government Members is “What a fine mess you’ve left us in,” so it is important to remind people of the facts. I recently met people from the Bank of England, and I have in my hand a graph showing that our growth rate rose continuously between 1998 and 2008, but then dipped when there was the financial tsunami. The GDP growth under Labour

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was 37% before that dip. We then had the fiscal stimulus thanks to our friend Mr Obama and my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), which got us back to some fragile growth moving into 2010, but then the Tories came to power.

I also have a graph showing that two thirds of the deficit—the green bit—is from the bankers and the other third is the Government spending above their earnings in order to pump-prime, to avoid a depression and deliver a mild recession and a prosperous future for Britain. What happened? Obviously, George Osborne came along, announced that half a million people would be sacked but he did not say who they were, so public servants stopped spending—

Mr Deputy Speaker (Mr Nigel Evans): Order. Please refer to the Chancellor by his title, not his name.

Geraint Davies: Exactly. The Chancellor, no less, decided to announce that half a million people would be sacked but did not say who they were, so people stopped spending and started saving, consumer confidence fell and the economy has been flatlining ever since.

Mel Stride: The hon. Gentleman refers to employment. Does he recognise the fact that there are 1 million new private sector jobs net, unemployment is falling and the level of employment, which is currently about 30 million, is the highest on record?

Geraint Davies: I am grateful to the hon. Gentleman for that intervention. If 1 million more people are in work but there is zero growth—in other words, there has been no overall increase in production—that implies that people who had been in full-time jobs are now in part-time jobs and that aggregate production has not increased, which is a complete failure. It is symptomatic of Tory Britain, with people scratching around for anything they can find in difficult times.

There has been some discussion of the 50p rate of tax. As I have mentioned, the reason the Treasury thinks it would not make any money from a 50p rate is that it knows that millionaires can move money between tax years, which is precisely what they have done. They knew that their Tory mates would reduce the top rate of tax the next year and so simply shifted their income to that year. The point that I had wanted to make in another intervention—I appreciate that two were taken—relates to the idea that the 50p rate does not work and is therefore dead. However, people earning between £32,000 and £42,000 already pay 52% marginal tax—12% for national insurance and 40% for income tax—but of course no one talks about that. How does that change their behaviour, and why is it fair that they pay the higher rate while people on £150,000 do not because they have accountants? It is ridiculous.

Mark Reckless rose—

Geraint Davies: Does the hon. Gentleman want to intervene? Perhaps he earns £150,000; I do not know.

Mark Reckless: I want to develop the hon. Gentleman’s point. We currently have a tax band between £100,000 and £115,000 in which people face a marginal tax rate of 62%, with the personal allowance and national insurance.

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Is he suggesting that that is somehow justifiable, or more justifiable than the top rate tax he is suggesting for those earning more than £150,000?

Geraint Davies: I am simply saying that those with the broadest shoulders should take the greatest weight, that there is a strong case for a 50p rate of tax and that some people already pay the 50p rate. I am not saying that they should pay that. Our tax system is not very fair, and I will move on to that later.

The problem we face is that there is no growth in our economy because there is no consumer demand, and although the deficit—the rate at which the debt is increasing —has gone down by 25%, as we are constantly reminded, the overall debt continues to rise to unprecedented levels. We are almost back to a pre-1997 situation in which we are paying people to stay on the dole and, at the same time, cutting services. That is the old Tory vicious cycle. We want to get back to Labour’s virtuous cycle, with people in jobs and paying tax and with unprecedented growth.

The other point that is always made is that the banks were unregulated and that is why everything went wrong. The reality is that the Financial Services Authority—I know that it has had a bad name—was introduced in the teeth of opposition from the Tories, who said that there was too much regulation already. Then, when the banks started going bust, the Labour Government said that we had better nationalise them so that people could still get money out at the hole in the wall. The Tories said, “No, let them fall.” That would have been a complete catastrophe. So in other words, the previous Labour Government did a very good job. We now have a situation in which, instead of confronting the deficit, which is what we should be doing, the Government have the wrong balance between growth and cuts, and within the cuts there is the wrong balance—80% cuts and 20% tax.

As for the claim that we are all in this together, we are now in a situation in which the poor are paying the most. I mentioned in a brief intervention—I also raised this in Prime Minister’s questions—a man who came to see me who had £20 a week, after utility bills, for food and clothing. He now faces a further hit of about £7 a week for having an empty bedroom. How will he survive on £2 a day? Allegedly, that change will save the Government about half a billion pounds, but of course it will not, because obviously people will move to the private sector, where rents are higher, and there will be empty houses in the public sector because councils will be forced to evict people. It makes no economic sense at all. However, if it did raise half a billion pounds, which is about one twentieth of what the Chancellor is investing in the tax thresholds, the hit to the very poorest will be similar to the gain to a very large number of people, and that will cost a great deal of money.

The point I am trying to make is that what will probably result in no savings will inflict enormous hardship on the most vulnerable, which is unnecessary and wrong. Those people, because they are very poor, have no option but to spend all their money locally, which helps to boost growth. If that money is redistributed from the very poorest to the squeezed middle, which is obviously good for votes—a callous and cynical manoeuvre in difficult economic times—then clearly that is not in favour of growth either. In so far as it will push money

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right up the income scale to the millionaires who live in mansions—the people we have been talking about—what will they do with the extra money the Government will have bunged to them? The threshold has gone up, so those at the top will also gain as a result. They will hide it away offshore.

There are therefore difficult issues to confront. We need to invest in our productive economy, but what is a fair way to do that in a—dare I say it—one nation way? Britain wants a one nation future that works and a future that cares, and the question for us all in difficult times must be how we deliver that. How do we invest, as I mentioned during Treasury questions, in super-connectivity for the city of Swansea? We do it on the back of investment in universities, electrified rail and communications and by marketing city regions, and indeed Britain, for inward investment. Those are all important. The Minister mentioned some of the issues about marginal corporate taxation, but the research tends to show that the major inward investment drivers are around research and development skills and access to markets, and we are well positioned on that.

On corporate taxation, there is a lot to be said—to be fair to the Minister, he mentioned this—for the idea of taxing economic activity where it occurs, whether we are talking about Google, Amazon or other companies. Amazon is local to my constituency and provides valuable jobs, but it needs to be fair and there needs to be a level playing field. If people are buying on Amazon rather than at a local shop, it is important that the local shop knows that they are all playing the same game.

Let us take the example of Apple phones and all the technology in the phone I am holding in my hand. The internet was invented here, and the other stuff, such as touch-screen and voice-activated technology, was invented in the national institute of science in California. So Apple is being taken to court by California for $26 billion because it does not pay any tax. Apple has taken innovation from the public sector, repackaged it, branded it, manufactured it overseas and got it taxed somewhere else. A big issue is that global conglomerates need to be brought to account and to pay their contribution to the public services where people are consuming their products.

Some of these people obviously live in mansions. The issue about the mansion tax, of course, is that it is part of a more general review of council tax, as other Members have mentioned, which has not been uprated. There needs to be a progressive system of taxation. Obviously the mansion tax, which is a Liberal Democrat proposal, had not been completely thought out in all its intricacies, but it is a direction of travel. If someone lives in a £2 million house, it is not that difficult to find ways of getting income out of it. It can be rented out and, with the rental income, the owner could have a palatial place in south Wales and a profit, so they could sit by the sea and enjoy themselves. For those people who are stuck in £2 million cupboards in London, allegedly, and we feel sorry for them, there are ways of releasing equity, as they could be rented out and people will pay the market rate.

Gordon Birtwistle (Burnley) (LD): I am listening to the hon. Gentleman make some progress on the mansion tax. Obviously it is a Liberal Democrat policy, and I am really looking forward perhaps to voting for it later.

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Can he explain to me—I am keen to know—whether it will be in the Labour party manifesto at the next election?

Geraint Davies: Sadly, I cannot confirm that at the moment because I am not quite in a position to be writing the party’s manifesto, although I have ambition.

In difficult times we should focus on growth and ensure that those with the broadest shoulders take the weight and that we do not just squeeze the poor for the bankers’ mistakes. This proposal is part of a tapestry of opportunity to move forward on that, and we call on the Liberal Democrats to support us on what is, after all, their idea. Locally in Swansea the Liberal Democrats have been a very strong party with control of the council. Since 2010, they have been in a woeful state because people are worried about their broken promises on tuition fees and so on. This is their chance to redeem themselves so that there can be some glimmer of belief in a future for the Liberal party. If they do not vote for their own policy, what hope is there? Very little, I am afraid.

Mr Deputy Speaker (Mr Nigel Evans): I call Stephen Williams.

2.10 pm

Stephen Williams (Bristol West) (LD): Thank you, Mr Deputy Speaker—indeed, a man from Swansea.

It is a pleasure to speak in favour of the Government amendment tabled by the Deputy Prime Minister and the Prime Minister, because it reflects the realities of coalition Government. The amendment is completely frank about the fact that there are two parties in coalition and that one of them—my party, the Liberal Democrats—supports a mansion tax while the other, the Conservative party, does not. When we conducted our coalition negotiations back in May 2010, the Liberal Democrats were successful in getting many of our policies into the coalition agreement that is now being implemented by the Government, but the mansion tax was resisted by the Conservative party, and that is why the Chancellor has not, thus far, put it forward in his Budgets. We accept that position. Our amendment reflects the realities of the coalition.

Anas Sarwar: Will the hon. Gentleman tell us what part of the Opposition motion he cannot support?

Stephen Williams: I will come to that, if the hon. Gentleman is patient.

The key sentences in the Opposition motion and in the coalition Government amendment are those which refer to our support for tax cuts for people on low and middle incomes; we have that in common. However, it rather depends on what one means by that. We know what we mean by it. At the last general election, the Liberal Democrats said that the most effective way to cut taxes for people on low and middle incomes was to raise the income tax threshold to £10,000. That policy was accepted by our coalition partners and it has now been delivered by the coalition Government. I listened carefully to what the Leader of the Opposition said in his speech just a month ago when, lo and behold, Labour was converted to a mansion tax. The purpose of

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that conversion was specifically to right the wrong that the hon. Member for Nottingham East (Chris Leslie) acknowledged was done in 2007—in other words, to reintroduce the 10p rate. That is what Labour’s policy is. The motion is not entirely clear about that, but we have heard the words of the Leader of the Opposition. We know that, yes, they are now in favour of a mansion tax, but specifically to fund a 10p tax rate, which we think will be completely ineffective.

Nic Dakin: Was it yesterday that the hon. Gentleman said on the BBC2 “Daily Politics” show that he could have written the Labour motion himself?

Stephen Williams: Yes, it was. I said it on “Westminster Hour”, on Radio 5, on the “Daily Politics” show, and on other programmes as well. Indeed I could have written it myself. However, I know precisely what I mean by a mansion tax, but we have not heard spelled out in any detail what Labour Members think it should be. I know what I mean by a tax cut for low and middle-income earners, because that is what this Government are doing while we are in office. I am entirely clear what I mean by the text of the motion; the trouble is that it has not been exactly clear what Labour Members mean by their words.

Chris Leslie: We support the proposition that the hon. Gentleman has elucidated about a mansion tax, so, okay, we are clear about what we mean by a mansion tax. When the Business Secretary said that if the motion were

“purely a statement of support for the principle of a mansion tax, I’m sure my colleagues would want to support it”,

was he wrong?

Stephen Williams: The Business Secretary is never wrong; he is a very wise man. I do not see any great difference between what he said and what I said on the record several times yesterday and over the weekend. We know what we mean by a tax for low and middle-income earners. We know what Labour Members mean as well—a reintroduction of the 10p tax rate, and that is why we disagree with them.

Stephen Lloyd (Eastbourne) (LD): Will my hon. Friend give way?

Stephen Williams: I cannot give way again because I have now lost all my concessions.

The reason the Business Secretary—our shadow Chancellor, as he then was—proposed a mansion tax towards the end of 2009 was that property wealth in our country is woefully under-taxed. Our only property tax is council tax. In England, the top council tax band, band H, is twice the rate of the broadest band, band D, and three times that of the basic band, band A. That means, in effect, that in our only property tax the rate for a £10 million mansion is only three times the rate for a bedsit. That is clearly a ludicrous way to tax property. The band H top rate is only £320,000. Let us take as an example the royal London borough of Kensington and Chelsea, just along from where we are now. A £90 million mansion—I can see no other way to describe a £90 million house—in Kensington Palace gardens pays council tax of £2,151. That is the top rate of council tax that can possibly be paid in the London borough of Kensington

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and Chelsea—exactly the same as the rate for a small flat in that borough. That is a nonsensical property tax. That is why my party, the Liberal Democrats, backs the introduction of a mansion tax on properties with a value of over £2 million, with an annual levy of 1% on the excess over £2 million. That means that someone who had a £2.1 million mansion would pay mansion tax of £1,000 tax a year, while someone with a £3 million mansion would pay mansion tax of £10,000 a year.

The Minister and several other Members have asked what would happen to people who are asset-rich but income-poor. We have always had a very simple answer to that. In those cases, the tax would be rolled up and would crystallise once the property was sold and then be met from the sale price. That is a very simple concept for a very simple tax. We have also said that it should be a national tax, not a local tax. We have not hypothecated it to any particular tax measure, and we have not tied it to the reintroduction of a 10p tax rate as the Opposition have, which is why we do not support their motion. However, it could take us to the final milestone of getting to the £10,000 income tax-free threshold that I am reasonably confident will be announced very shortly. It could certainly contribute to getting the Liberal Democrats to where we wish to go next—that is, to making sure that every adult on the national minimum wage, which is currently £12,071, should not be caught in the income tax net. We may be able to make progress towards that in the latter days of this coalition, but it will certainly be in the Liberal Democrat manifesto in 2015; we are completely clear about that.

Labour Members have linked their mansion tax proposal—at least the concept, as they have not fleshed out what it really is—to the reintroduction of the 10p tax rate. I think it is fair to have a little look at Labour’s record on the 10p tax rate. I love Budget debates, and I have been in the House for all of them in the eight years that I have been an MP. In March 2007, I was sitting just where the hon. Member for Stockton North (Alex Cunningham) is sat on the Opposition Benches as I listened to last Budget speech of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in which he announced the abolition of the 10p tax rate. That was met on the then Government Benches with wild cheers and waving of Order Papers because it was to finance a cut in the basic rate of tax from 22% to 20%. Why was that being done? What was so crucial about its timing? As we know, the then Chancellor was heir apparent to the then Prime Minister, Tony Blair. He thought that there was going to be an autumn 2007 general election and that an income tax cut for better-off people in society, financed by the poorest, whom he assumed would always vote Labour, seemed like a good piece of populist politics—but it backfired and blew up in his face. Six years on, we are asked to believe that Labour wants to make good for that mistake.

There was another tax change in 2007 that does not get much attention. A lot of Labour Members here today were not Members of the House at that time, so I will forgive them for not remembering, but perhaps someone else on the Labour Benches wants to remind us of the other tax change that the former Prime Minister introduced in 2007. I see that there are no volunteers, so I will tell the House, because I can see that Members are now in suspense: it was a doubling of the inheritance tax threshold from £325,000 to £650,000 in a double-income

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household. That is Labour’s record in government: tax cuts for the wealthy. We know that they were completely discombobulated by the then shadow Chancellor’s announcement to the Conservative party conference of a cut in inheritance tax and were keen to match it.

I am sure that Labour Members love reading Polly Toynbee’s column every week and that it is compulsory reading at the breakfast table in Labour households and in the Tea Room. In her column in The Guardian this morning dear Polly said:

“Labour barely dared breathe on the riches that soared upwards on their watch.”

I could not agree more. At the time of its abolition, the 10p tax rate taxed incomes under £7,455 at 10%, but since taking office we have taken such incomes out of tax altogether. Surely it is better to be taxed at 0% than at 10%, so the coalition has been much fairer to people on low incomes.

That is not all that the coalition has done. We have restricted pension tax relief. Up to May 2010 under Labour someone could put more than £250,000 a year into their pension pot, whereas this year under the coalition the figure is only £40,000. We raised capital gains tax from 18% to 28% and stamp duty on properties worth more than £2 million to 7%. We might not have been able to persuade our coalition partners on an annual mansion tax, but we have persuaded them on a mansion duty when properties of that value are acquired.

We have done more to tackle avoidance. We set up an affluence unit in Her Majesty’s Revenue and Customs, which will examine in detail the affairs of 500,000 of the most wealthy people, and placed a 15% charge on domestic properties bought via a company—a classic example of avoidance that the previous Government did little to block, just as they did not block and, indeed, voted against disguised remuneration when we proposed to tackle it in one of our first Finance Bills.

We have been through many Opposition days, both in government and in opposition. When the votes are counted at 10 past 4, very little will have changed. What are the origins of this motion? We know that it is based on a policy stolen from the Liberal Democrats. I understand the right hon. Member for South Shields (David Miliband) also proposed it in his leadership bid, so one brother steals from the other as well as from the Liberal Democrats. This is pantomime politics, but nobody is laughing.

2.22 pm

Mr Russell Brown (Dumfries and Galloway) (Lab): I apologise for the fact that, as I indicated to you, Mr Deputy Speaker, I shall need to leave the Chamber at about 2.30 pm, although I shall return, so thank you for calling me now.

I support the motion, the fundamentals of which simply call

“on the Government to bring forward proposals for”

a mansion tax “at the earliest opportunity”. It is a proposal—nothing more, nothing less—that I should have thought the junior coalition partner supported.

I should like to remind the House, especially the Liberal Democrats, of a speech on tax and fairness delivered last month by the Deputy Prime Minister, in which he said:

“I continue to believe we should ask for what would be a modest contribution from the very wealthy, either in the form of a

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Mansion tax—a 1% levy on properties worth more than £2m—applied just to the value over and above £2m; my preferred option. Or, alternatively, we could introduce new council tax bands at the top end, again, affecting properties worth over £2m. . . Nothing could do more to demonstrate a commitment to greater fairness in our tax system. I will continue to make this argument, in this Coalition and beyond. My approach is simple: taxes on mansions; tax cuts for millions.”

Only time will tell whether there is the slightest hint of sincerity in those words.

We are debating the issue today only because our nation’s economic uncertainty and problems mean it is right that we do so. What is the current problem? It is squeezed living standards and a flatlining economy. Families are working harder for longer and for less, yet almost daily they witness prices going up and up. The talents of millions of our young people are being wasted and small businesses, which will drive our economy, are being held back by banks and a Government who are not on their side.

Yesterday evening I met representatives of a number of small and medium-sized enterprises based in the London area. They told me and other Labour Members that banks need to work for them and not against them, which has been their experience of the past two or three years: banks are not lending to the most entrepreneurial businesses, and in their eyes everything is going backwards. The economy is not growing and has flatlined over the past two years, and the deficit is going up. Government borrowing is increasing as a result of economic failure. Those of us who watched closely in the ’80s and early ’90s saw what economic failure did to the nation. We are witnessing nothing short of trickle-down economics: the middle is being squeezed and almost daily there is a race to the bottom.

The Government’s economic vision is of a race to the bottom in wages and skills, rewarding only those at the very top and leaving everyone else squeezed as never before. Next week taxes will be cut by an average of £100,000 for 13,000 people earning more than £1 million, yet millions of working families will be asked to pay more as their tax credits are cut.

The Government refuse to stand up to the energy and train companies that are squeezing family budgets. Debates have been held in the House over a prolonged period, but nothing has been done to protect some of our poorest families and communities.

Andrew Gwynne (Denton and Reddish) (Lab): From listening to everything said by Members on the Government Benches one would think that everything in the garden was rosy, but my hon. Friend makes a point that has been echoed by research from the Institute for Fiscal Studies: that under the measures in the Government’s autumn statement the poorest 40% in society are losing much more than the richest tenth.

Mr Brown: My hon. Friend is correct: the figures given by the IFS are there for all to see and cannot be disputed. We are seeing real pain and suffering, hard as never before, in many communities. I am sure that constituents of hon. Members on both sides of the House are looking to their MPs for guidance and support. I fear in particular for young families. Those of us who are slightly more senior in years know what it is

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like to be told that we have to tighten our belts, but younger families find it difficult to cope with such comments.

Over the past two years the Government’s approach has been shown to be not working, but Labour Members know that it can never work. Prosperity will be achieved only when everyone plays their part in building the economy—a recovery made by many, not just a few at the top who believe they are aiding some recovery. That is the lesson of history. In the industrial revolution, which I know was way back, it was those who went down the mines, spun the cotton, built ships and constructed bridges who drove the economy forward. The nation is crying out for a fairer tax system, which we will put at the heart of our new priorities. As well as cancelling the millionaires’ tax cut and the changes to tax credits this April, a Labour Budget would tax houses worth more than £2 million and use the money gathered to cut taxes for working people. A fairer tax system would send a message about how Britain will succeed in the years ahead that says: “When you play your part and make your contribution to the economy, you will be rewarded.”

The Labour party would tackle vested interests. We need to act when working people are paying more than they should. We have said that we would break the stranglehold of the big six energy companies, stop the price rip-offs of the train companies on the most popular routes and cap the interest on payday loans.

Our country has to change. We must end the culture that says that university is always best and that vocational education is second class. That simply is not true. We see the need to create a new technical baccalaureate to complement A-levels. We see the need to give employers, for the first time ever, control of the money for training. We see the demand for Britain’s employers to step up and offer real apprenticeships and proper training.

Today, we are increasingly two nations with high-skilled, high-paid jobs for those at the very top, but low-skilled, low-paid jobs that involve long hours for too many people. A one nation economy needs to support businesses that create sustainable middle-income jobs by introducing a modern industrial policy.

Stewart Hosie: Will the hon. Gentleman give way?

Mr Brown: Yes.

Mr Deputy Speaker (Mr Nigel Evans): Order. I hope that the hon. Gentleman’s question will be about the mansion tax, because it seems as though the speech is going somewhat wider.

Stewart Hosie: I very much agree with the tenor of what the hon. Gentleman is saying, particularly in relation to fair taxation. However, I remind him that barely any of the sensible things that he wants to do were achieved in the 13 years of the Labour Government. Some of what he says is therefore rather galling to listen to.

Mr Brown: The hon. Gentleman and others in this House have complained long and hard over many years about the investment that was made in this country by the Labour Government and the work that they did to stabilise and take forward the economy. There is a reluctance to remember what had to be done at the time of the crisis when the banks failed. We had to support the economy of this country by supporting those banks.

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To conclude, I will return to the point that I made at the beginning of my speech. All we are asking is that the Government bring forward proposals for a mansion tax at the earliest opportunity. We are not asking that a mansion tax be introduced, but we need to engage in the debate. I would go further and say that what our nation needs and deserves above all else is an open discussion about taxation and what it means to our country. What can taxation deliver for the people of our nation? Our European neighbours have such discussions.

I hear what Liberal Democrat Members say, but any sincerity that they have must be shown in the Division later this afternoon.

2.33 pm

Mark Reckless (Rochester and Strood) (Con): It is a pleasure to follow the hon. Member for Dumfries and Galloway (Mr Brown), who ingeniously addressed the topics of both of this afternoon’s debates and some even broader topics.

I will confine my remarks to the taxation of high-value property. The motion refers to a mansion tax on properties worth more than £2 million. A serious problem with the motion is that the Government have already brought in a range of measures to increase the incidence of tax on the owners of properties worth more than £2 million. No definition of “mansion tax” per se is provided in the motion.

The Leader of the Opposition hypothecated the revenues that would purportedly be raised by the mansion tax to reintroduce the 10% rate of tax, which was abolished by the previous Government. The cost of that would be some £7.3 billion. Research that was published recently shows that to raise that amount of money, a so-called mansion tax would have to be introduced not on properties worth more than £2 million, but on properties worth more than £415,000. It may be that the Opposition wish to tax people in that class of income more. Perhaps they think that they are rich, are benefiting too much and need to pay more to the Government. I look forward to their fighting the next election on that basis.

Meanwhile, our coalition partners have said that there should be a mansion tax that applies only to residential property worth more than £2 million. However, we have also heard from the Liberal Democrats—I am not sure whether it came from the federal policy committee or quite how they develop these policies—that it would apply not just to mansions above £2 million, but to property generally above £2 million. It is therefore just as important for somebody who has 10 flats worth £200,000 each to pay the extra tax as somebody who has a so-called mansion worth £2 million. Apparently, they are going to go further and inspect the contents of jewellery boxes and levy taxes on those as well.

Stephen Williams: My hon. Friend is setting various hares flying across the field. Of course, I am not in favour of hunting, but those hares need to be stopped from running. The jewellery tax is complete nonsense. As I have said many times on the record, we are not in favour of a net wealth tax that allows HMRC to look beyond people’s front doors. On the property portfolio, if somebody owned 10 flats, the nine that they did not live in would probably be attracting rental income and so would already be taxed. A mansion tax would apply to somebody’s principal residence if it was worth more than £2 million.

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Mark Reckless: I am grateful to my hon. Friend. He speaks about a person’s “principal residence”, so I assume that he would allow them to remain exempt from capital gains tax, notwithstanding the £2 million-plus property that they live in.

Mr Charles Walker (Broxbourne) (Con): If it is somebody’s principal residence that will be taxed if it is worth more than £2 million, does my hon. Friend think that the threshold will be £4 million for husbands and wives who are living together in a home?

Mark Reckless: Who can tell with these things? My hon. Friend the Member for Bristol West (Stephen Williams) has given assurances, but the policy proposals that I cited have been submitted to the federal policy committee of his party. It is difficult as an outsider to judge how formal and important that is, but there are clearly Liberal Democrats who are talking about a broader tax on wealth and capital, including on jewellery. I think that would be a mistake.

It is unfortunate that the Opposition with this motion and our friends on the Liberal Democrat Benches have become so focused on the arbitrary sum of £2 million. The Government are doing very good things in raising tax from people who own high-value properties but have not been paying their fair share of tax. The Opposition and the Liberal Democrats seem to want to confine their efforts to rein in tax avoidance to those who own houses worth more than £2 million. I and my Conservative colleagues do not understand why we should be concerned about tax avoidance just when a person’s house is worth more than £2 million.

It is hugely welcome that the Government are bringing in the anti-avoidance measure of a 15% tax when homes that are worth more than £2 million are enveloped into a company, which is generally done for the purposes of tax avoidance. However, I am not entirely clear why we are doing that only for homes worth more than £2 million, except for the fact that that is the arbitrary number that has been chosen by the Liberal Democrats for such taxation. [Interruption.] The Opposition are calling out, but they did nothing about this matter for 13 years. It is a huge improvement that this Government are dealing with tax avoidance using properties worth more than £2 million.

Mel Stride (Central Devon) (Con): Will my hon. Friend give way?

Mark Reckless: If I may, I will continue for a while.

There have been consultation papers and draft legislation on how the anti-avoidance measure will be introduced. There will be self-assessment, so there will be no need for the great costs of revaluing properties. I am sure that the Minister is keen to raise more money, so will he say whether there is any hope that the Government will take action against people who avoid the 5% tax on a property that is worth between £1 million and £2 million by putting it into a company?

Perhaps the Minister will assist me on another point. Where people have enveloped houses into a company there will be an annual charge of between 0.3% and 0.7% of the property’s value, which is welcome. Many of the papers have suggested that the purpose of that is to encourage people—or in this case companies—to

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de-envelope their properties, and the measure will come in only after 1 April 2013. Do the Government expect stamp duty to be paid on those de-enveloping transactions, so that if the property’s value is more than £2 million there will be a 7% charge, or do they expect the sale to be from a controlled company to the person controlling that company, perhaps at a nominal rate that will not attract stamp duty, in order to recoup some of the avoidance they may have made over previous years? I would be interested to hear the Minister’s response to that.

As well as dealing with tax avoidance on properties under £2 million, I would also like non-residents to make a fairer contribution. I was first alerted to the issue by the Chancellor when in opposition. He said that he found the situation extraordinary, and there was a great deal of resentment when he explained how it worked and about the exemption from capital gains tax for non-residents. I do not understand why a resident of this country must pay capital gains tax on the sale of their property—unless it is their principal residence—yet a non-resident is exempt from that tax.

A huge flow of overseas money has come to this country as people fear the break-up of the eurozone and there is a rush to safety, and much of that has gone into property in central London. We say to people who own those homes, “As long as you don’t live there and you stay overseas, we will give you a tax break and you won’t have to pay capital gains tax.” When we go to Mayfair or parts of Belgravia, it sometimes feels as if not many people are about. We are subsidising and giving a tax break to people as long as they do not live in this country, and I have never understood the purpose of that.

Given that the Labour party did nothing about that situation for 13 years, I was pleased that the Budget and Finance Bill contained measures to extend stamp duty to at least some overseas residents. The Government consultation states:

“The Government announced in the Budget that it will extend the Capital Gains Tax (CGT) regime from April 2013 to gains on the disposal of UK residential property by non-resident non-natural persons, such as companies. The measure creates a more equal treatment in the CGT regime between UK residents and non-residents, and brings the UK’s tax policy in line with that of other countries, many of whom already tax non-residents’ gains.”

If we want an equal regime between UK residents and non-residents, why are we extending CGT only to non-resident, non-natural persons—basically companies? Surely we should also extend it to natural persons who are resident overseas. Other countries are doing that; India and China have made moves in that direction, so why not us? Some industrialised countries do not do it, but none of those have such a pool of property that acts as a free piggy bank for overseas residents. We keep their wealth and capital completely secure in central London yet they pay no capital gains tax on it. Could we perhaps consider going further in that area and look at extending capital gains tax to overseas non-residents who are natural persons, rather than concentrating simply on companies?

I welcome what the Government are doing. The Liberal Democrats refer to a mansion tax on properties worth more than £2 million, but the Government are

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already doing substantial work to obtain a more proper tax take from such properties and we could look at whether that could go further. Obviously, I do not expect answers about what will be in the forthcoming Budget, but in some areas higher tax would be a good thing. I am not generally in favour of that, but where people avoid tax by putting houses into companies, even if they are worth less than £2 million, we should try to get the proper tax. Where overseas residents are doing nicely by securing capital in the UK but paying very little for the privilege, by taxing the capital gains they make on later sales of those houses it would be welcome to see them paying their share and doing a little to help us close the deficit, which, of course, is the great uniting purpose of the coalition.

2.44 pm

Sheila Gilmore (Edinburgh East) (Lab): I am pleased to follow the hon. Member for Rochester and Strood (Mark Reckless) because much of this debate seems to have been spent in an argument between the two coalition partners about how they would define certain types of taxation, and the problem with the amendment is that it has to look two ways at once. The Liberal Democrats have been prepared to break rank on other issues, but this matter is clearly not one of those. Interestingly, it is often on crucial financial or welfare issues that they do not break ranks but keep voting with the Tory-dominated Government, which is regrettable.

These are issues of fairness. We have heard a lot from those on the Government Front Bench and the Liberal Democrats about the increase in the tax threshold, which they suggest is much better than anything else that could have happened—it is better than the 10p tax rate, so we should be satisfied with it. We must remember, however, that for many people that tax threshold was bought at the expense of big losses in things such as tax credits.

For many families, the net effect of such measures means not that they are better off but that they are worse off, and the Liberal Democrats in particular must face up to that. In order to get the tax threshold through —that was clearly part of the coalition agreement—the Liberal Democrats have had to accept some pretty unpalatable things that go with it and, on balance, a lot of low-income households are not particularly grateful for that. The increase in the threshold also has other consequences.It is an expensive way to help the low paid because of the way it goes to everyone, not just the low paid.

Barry Gardiner (Brent North) (Lab): I am following my hon. Friend closely and she makes a powerful case. Does she agree that many of our constituents feel that the Liberal Democrats are not so much ameliorating the Conservative Government as facilitating it?

Sheila Gilmore: Indeed, and back in the beginning the decision to go into coalition with the Conservatives—rather than, for example, entering into a looser agreement —was to facilitate many of these measures. In crucial votes of the kind I have mentioned, the Liberal Democrats have not broken rank at all. We have heard a lot of warm words, particularly from the Deputy Prime Minister, about things such as the mansion tax, but when we get down to it, they turn out to be only warm words and

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not something that Liberal Democrat Members are prepared to stand up for in this House and within the coalition.

Fairness is a large part of what we must all be about. Over the past three years, the very poorest people, those on low earnings or those who, for example, are unable to work because of illness and disability, are bearing substantial contributions that we are told cannot be alleviated because our economic recovery will be put at risk. Over the past few weeks we have had heated debates about the bedroom tax. The issue has been raised on numerous occasions and we have been told time and again that it is essential to make those savings to reduce the deficit.

Mel Stride: Given the under-occupancy subsidy—after all, a tax is where one earns money and the state comes and takes it away, but that is not what we are dealing with—does the hon. Lady have no sympathy for the quarter of a million people living in overcrowded accommodation and the 2 million families on the housing waiting list who are desperate for bedrooms that can be freed up through this measure?

Sheila Gilmore: I have great sympathy for people who are overcrowded and for those on the housing waiting list. The majority of people waiting for housing in my city are looking for small houses, so that could also cause certain problems.

Fundamentally, however, this is not a housing issue. If we want to make the issue about housing, we should deal with it as a housing issue and look at ways of encouraging and facilitating moves for people who want them. That is not necessarily happening. People have asked me, “Well, if I did move who would help me pay for this move? Who will reimburse me for the fact that I put my own kitchen into this house? My landlord did not quite get around to it, so when I was working a few years ago I put in that new kitchen. Is somebody now going to reimburse me for that? Are they going to help me with the cost of moving my things? Are they going to help me with the cost of setting up in a new place? I don’t think so.” If a local authority—some do—decided that it wanted to encourage people to move once they had outgrown their homes, it could do so. It might have a cost, but it would have a benefit.

If every single person suffering from the bedroom tax was able to move—

Mr Deputy Speaker (Mr Nigel Evans): Order. Is this a bedroom tax on mansions? This is an Opposition day motion. I think the hon. Lady is actually holding it in her hands. Has she read it, and, if she has, could she perhaps stick to it?

Sheila Gilmore: The point I was going to make in relation to the matter that was, after all, raised in an intervention is that if everybody moved successfully and reshuffled, there would be no saving, and that is odd because a saving is wanted. It is in that context that people are saying, “What sort of fairness is it that imposes such a great burden of trying to effect economic recovery on those who are least well off? Could we look at other measures to show that we really are all in this together?” That is where the mansion tax comes in.

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The mansion tax enables us, in part, to really feel—as a community and as a country—that people are bearing a fair share of the burden. We have heard a lot about tax avoidance and tax evasion. It worries me greatly that the justification given for removing the 50p rate of tax is that people are not paying it. Instead of looking at why people are not paying it, and whether anything could be done to ensure that it was paid, we again hear, “Actually, we’ll just take it away because they aren’t paying it.” That is not a good message to put out.

We have also had reference—in relation to the mansion tax, Mr Deputy Speaker—to not wanting to have such a competitive tax regime that we risk people fleeing our shores. Reference was made to the PricewaterhouseCoopers report about competitive tax rates. There is an interesting coda to that report from some of those who were surveyed. The question then becomes: will the increased competitiveness lead to increased investment in this country, because that is what is really important? Many of the tax people thought it was crucial to turn improved tax relief on capital expenditure into investment in this country, and that it should be the No. 1 priority for the UK. In 2010, the Chancellor abolished capital allowances for investment in his first year in office. Perhaps he would like to look at the whole report, and not just the parts that suit him.

An argument has been made—as it always is with regard to rates and council tax—about people who are asset-rich and income-poor. It is usually raised as a reason for not putting up council tax banding, for example. In the old days, it was used as a reason for not making changes to the rating system. Yes, we can all come up with examples of people who are in that position. Usually, the example is a widow who cannot afford to pay. However, we cannot design our entire system of taxation around that, and there are ways it can be mitigated, as there are with council tax. If someone is genuinely as income poor as has been suggested, they would—at least until the Government decided to change the rules on council tax benefit—have been eligible for assistance with their council tax. There are always ways to help such people.

Earlier, I made what to some people might have seemed an unfair comparison. We were being asked to think about the widow who might struggle with a mansion tax. The 60-year-old widow I referred to is being asked to pay £13 per week out of an income of £71 a week, and the answer is that she should take in a lodger. If we want to be fair to both groups, we have to treat them with equal compassion.

Mr Charles Walker: As the hon. Lady will know, property values vary across the United Kingdom. A £2 million house in London may be the equivalent of a £500,000 or £750,000 house in Edinburgh. For the sake of fairness, does she think that there should be an additional tax on properties worth more than £750,000, so that people really do feel that we are all in it together and that this proposed tax will not just be borne by London and the south-east?

Sheila Gilmore: I am not convinced by that argument. If we were to enter into that, we would have do so in ways that I suspect the hon. Gentleman would not find particularly palatable.

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There is nothing inherently wrong in levying a mansion tax. All the arguments made about the 50p tax do not apply to the same extent, because buildings do not disappear and cannot be shuffled around. It is a way of generating income and bringing in more tax revenue so that we can do all the things we want with public services, or, as we suggest, enable low-paid earners to have a 10p tax rate. Just because a mistake was made previously does not mean that we should not again consider a 10p tax.

2.57 pm

Alex Cunningham (Stockton North) (Lab): This is a debate about fairness, as well as a mansion tax. Unemployment in my constituency has been higher every single month compared with the previous year since the coalition Government came to power. There are 4,293 on jobseeker’s allowance, and many more want to work. My local authority, Stockton-on-Tees—we do not have many £2 million mansions—will shed 1,000 jobs before the current massive cuts are fully implemented. Councillors are working hard, but problems persist.

The Cleveland fire authority, which I met on Friday, faces tough decisions that could reduce the number of firefighters in the highest risk area in Europe because of the cuts and a funding formula that does not recognise the risk we face on Teesside. Other hon. Members have mentioned the unfairness of energy prices, train fares and payday loan sharks, and all are unfair, but it is the tax cut for millionaires that sticks in the craw. People see millionaires getting a tax cut at a time when working mothers face a £160 loss in their income. I could go on at much greater length about unfairness.

I hear from a friend of mine up on Tyneside, Ian Wilson, that Champagne Fever won the first race at the Cheltenham festival today. The partner of the horse’s owner earned £44 million in pay and bonuses last year. He is a banker. I am sure he can afford the mansion tax.

Kelvin Hopkins (Luton North) (Lab): I have some suspicion about anyone who earns £44 million. They may have received £44 million a year, but they did not earn it.

Alex Cunningham: My hon. Friend is much skilled in these debates and I take his point entirely.

Time and again, Government Members have challenged us to make clear what tax changes we would make to rebalance the unfairness in the tax system. I am delighted, therefore, that the Labour Front-Bench team has backed the Lib Dem policy of a mansion tax, while going further by saying that the money could be used to fund a 10p tax rate, which would bring immense benefit to the lowest-paid in our communities. It would be a tremendous boost to many of the lowest-paid people across Teesside and the rest of the country, including all the people who have landed one of these low-paid, part-time jobs that the Government gleefully boast about. Those people are to be praised and helped. Their pay is derisory, yet they want to work hard and be in a job, so we should do something to help them. They already face the prospect of a cut in income from the changes to tax credits from the end of this month, and today the Lib Dems, and others, could join us in helping to correct that unfair tax change and in recognising their commitment to hard work.

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We need action to tackle the unfairness in the system, to sort out the big six energy companies, to stop the rip-off rail fares condoned by the Government and to stop the poorest people—the most vulnerable in our society—being ripped off by payday loan companies and loan sharks. Let more of those with the assets, rather than those with none, pay the taxes. There is real poverty in our communities. One illustration is the increasing number of food banks. I will be opening another one on Monday at the New Life church in Billingham in my constituency. We should not have to be doing such things. We should not need food banks. I know that their use increased even when we were in government, but they should not be necessary.If we had a fair income tax system, we would not need food banks.

The mansion tax might mean £5 a week for some families. That would not buy a small glass of wine in a Canary Wharf bar, but it could make a huge difference to the people at the bottom of the earning scales. It would buy enough bread from Asda for a family of four for several days, yet the Tories—and, more shamefully, the Lib Dems—would miss the opportunity to put bread in the mouths of poor families by failing to send a message to the Chancellor that he should adopt this mansion tax in next week’s Budget. I am sure that people who own property worth more than £2 million could afford the extra charge to help the poor. If not, they can move to a less expensive property and dodge the tax. Like my hon. Friend the Member for Edinburgh East (Sheila Gilmore), I see a parallel with the bedroom tax. Thousands of people in my area are facing a cut in their income. The answer, apparently, is to move to a smaller property. Those with homes valued at more than £2 million but who cannot afford a mansion tax should do what the poor have to do and downsize.

I am one of those who supports higher taxes, particularly when people can afford to pay, so I plead guilty as charged. Earlier today, a Minister said that the Government were focused on the causes of poverty, but all the time cash is being shifted from the poorest to the wealthiest, just as the funds available to local authorities in the north of England are being shifted to the richer areas in the south. I said that unemployment was not falling in my constituency, but in some parts of the south it has fallen, albeit owing to part-time, low-paid jobs. The Government’s austerity measures have devastated local authorities in the north-east, and the contractors who build roads and houses and promote and deliver other services are the losers, being forced to pay off skilled workers who want to work and support their families.

Next Wednesday, the Chancellor will deliver his Budget for 2013-14. It is probably his last chance before the general election in 2015 to come up with a set of policies that could make a real difference to people’s lives. The biggest difference he could make would be to abandon his plan A, under which growth has stagnated, unemployment in areas such as mine has grown and deficit and debt reduction has become even harder, but we know he will not do it. He is tied to his ruinous plan A because he has staked his credibility on it—but there is no credibility in it. The Tories still talk about what will happen if the economy turns around, but if we return to growth, will ordinary people suddenly stop feeling the strain of higher costs and less money in their pockets? I very much doubt it.

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This ignores the fact that the Chancellor’s plan has already failed on its own terms. Not only is the national debt far higher than it was when he took office, but he has failed, and failed again, on growth. The reason is that without a good level of growth it is difficult to reduce deficits and debt, and as the Chancellor’s own Office for Budget Responsibility pointed out last week, cutting spending and hiking up taxes for ordinary people has slowed and stopped economic growth. As the ratings agency Moody’s pointed out when it downgraded the UK’s credit rating, the country’s lack of growth has made it nearly impossible for the Government to meet the only real goal they set themselves, which was eradicating the structural deficit.

Although a return to growth would be welcome, only strong growth would be enough to make up for the lost years of economic stagnation under this Government and to keep up with the growing and ageing population. Unless economic growth is above population growth, we are all getting poorer. Add to that the fact that the Government are redistributing from the bottom to the top by cutting the top rate of tax for millionaires while capping welfare, increasing VAT and cutting public services, and the scale of their failure becomes all the more apparent.

In Stockton North, we know all too well the impact of the Government’s policies. Long-term unemployment has more than doubled in the past 12 months and youth unemployment remains stubbornly high. Next Wednesday, the Chancellor has a chance to change course, cut spending less quickly and focus on taxing obscene wealth in order to invest in young people. He is very keen to point to the past and the failures—as he sees it—of the Labour Government, but he has been in his role for nearly three years and has failed abysmally. There will be much for a Labour Government to do in 2015 to address the unfairness built into our country by the Conservative-Lib Dem alliance. I have talked about energy, rail fares and housing, and we are already making clear some of the things we would do. Today, Government Members can help us get our fairness agenda under way by backing a mansion tax and helping to fund lower taxes for those who need them most—I hope they will.

3.6 pm

Nic Dakin (Scunthorpe) (Lab): This debate is about tax fairness, with contributions from both sides having focused on that challenge. The year 2013 is not 2008 or 2001; we are in different times and facing different challenges and, therefore, different choices. We are undoubtedly in tough times, in difficult times; we are in a period of austerity, and, as a result, we have different choices to make.

Individuals also have different choices to make. I am being contacted, as I am sure every other right hon. and hon. Member is, by constituents living through these tough times and finding it difficult to make ends meet, owing to rising prices, fuelled by the hike in VAT, which was one of the very first decisions of this Conservative-led Administration. Despite describing it as a tax bombshell in the general election campaign, the Liberal Democrats sadly supported this most regressive of tax increases. Energy bills, fuel bills, food bills and rail fares are all rising, making it difficult for ordinary people and families to make ends meet.

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Prices are rising and incomes are falling. Ordinary people are finding it difficult to make ends meet, because incomes are falling and people are losing their jobs or losing hours they want to work or reducing their pay in order to help businesses through these difficult times and to manage the situation together. That is what businesses in my constituency are doing—managing the situation with their work force—which often means reducing hours and pay, but keeping businesses and households afloat.

These are difficult times, with the squeeze on hard-working families worsened by the reduction in tax credit eligibility and the looming spectre of the bedroom tax, to which several right hon. and hon. Members have referred. People are struggling to make ends meet. They are doing their best to keep their heads above water. As my hon. Friend the Member for Stockton North (Alex Cunningham) said, we see the number of food banks expanding and child poverty rising. In 2013, these are things that none of us would wish to see in the United Kingdom—one of the richest countries in the world—on our collective watch. These are tough times in the real world.

Stephen Williams: Yes, in tough times we have to make tough choices. I recognise that some of them are uncomfortable, but does the hon. Gentleman lament the fact that in 2007, when budget revenues were increasing and the economy was perceived to be booming, the previous Labour Government decided to put up taxes on the very poorest?

Nic Dakin: The hon. Gentleman will be alert to the fact that I came into this House only in 2010. We can all look back with hindsight and be critical of decisions made at different times. One of the issues for us all in these difficult times is whether with hindsight on the decisions we are making today people will say we made the right decisions.

Mr Stewart Jackson (Peterborough) (Con): Why does the hon. Gentleman think that between 1998 and 2010, in a period of sustained economic growth, the welfare bill under the party he supports went from £53 billion to £111 billion? Does that not speak to a failure to tackle endemic issues of welfare dependency, which this Government are addressing?

Nic Dakin: The hon. Gentleman might not have noticed, but this debate is focused on fair taxes. He is right to draw attention to other things, but you would bring me to order, Mr Deputy Speaker, if I were lured down that route.

Sheila Gilmore: Let me say quickly that changes to demographic factors such as age are important in this respect, and 42% of the welfare budget goes on older people and pensions.

Nic Dakin: I am afraid my hon. Friend is also luring me down a route that I would rather not go down, because I would not like to face your ire, Mr Deputy Speaker.

Mel Stride: The hon. Gentleman is being exceedingly generous in giving way. As he has said, he is keen to talk about tax fairness. He referred earlier to the iniquity of

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reducing the top rate of tax for higher earners from 50p in the pound to 45p, which is coming up this April. Does he therefore not accept that, in his terms, the last Labour Government acted totally unfairly in having a top rate of just 40p in the pound right the way through until the last 36 days of his Government?

Nic Dakin: I thank the hon. Gentleman for his intervention, but I have not yet said that—I am going to say it later, so I will come to his point when that is appropriate.

I was describing the difficult choices that hard-working families are having to make to keep their heads above water. The obligation we face—those of us who govern, as well as those on the Opposition Benches—is to make difficult choices about where revenue is raised. It is therefore right and proper to look at ways of taxing people who have significant wealth, such as people who own properties valued at more than £2 million. Therefore, it is right and proper to look at ways of ensuring that that part of our nation makes a contribution in these difficult times.

We know that people of great wealth are sometimes quite imaginative and inventive when it comes to avoiding taxes. I commend the work of Government over the ages to find ways of tackling tax avoidance—this Government have done a number of things that are to be welcomed. Property is obviously difficult to hide. One of the big advantages of a property tax—a mansion tax, as expounded over the years by the Liberal Democrats in particular—is that it is difficult to avoid paying, because property is visually identifiable. As my hon. Friend the Member for Westminster North (Ms Buck) said earlier—she is no longer in her place—60% of high-value properties in London are owned by people from overseas. Indeed, I note the comments of the hon. Member for Rochester and Strood (Mark Reckless) on this issue. He made an intelligent and helpful contribution to the debate.

I am pleased to see the hon. Member for Eastleigh (Mike Thornton) in his place and I very much welcome him to the House. I am sure he will continue to build on his excellent maiden speech and make good contributions to the work of the House. However, prior to the by-election, the Deputy Prime Minister, writing in The Observer, described the Prime Minister as being “stuck in the past” for opposing the mansion tax. The Observer commented that this came

“amid signs that the Liberal Democrats are ready to challenge the Tories more vigorously over key aspects of economic policy.”

Today’s debate is an ideal opportunity for them to do that. The Deputy Prime Minister attacked the Prime Minister in his article, saying that the Conservatives were instinctively against fairer taxation

“even as people on lower incomes feel the pinch”.

He said that the plan for a mansion tax on properties worth more than £2 million, which was being backed by the Labour party, was an idea “whose time has come”, and said it was a “certainty” that some levy on high-value properties would be introduced soon. He continued:

“The Conservatives and opponents of fairer taxes have a choice. They can dig their heels in and remain stuck in the past. Or they can join with the Liberal Democrats and the chorus of voices seeking to make our tax system fair. Far better, surely, to move with the times.”

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I very much welcome the Deputy Prime Minister’s rather prophetic contribution to this debate. It puzzles me that the Liberal Democrats who have spoken so far have indicated that they might not support the motion. However, a number of them have been here for a large part of the debate, so I hope they will be persuaded by the power of argument.

It is worth noting that the motion says:

“That this House believes that a mansion tax on properties worth over £2 million, to fund a tax cut for millions of people on middle and low incomes, should be part of a fair tax system; and calls on the Government to bring forward proposals for such a tax at the earliest opportunity.”

As my hon. Friend the Member for Nottingham East (Chris Leslie) said from the Opposition Front Bench, nothing could be simpler. Indeed, this is the sort of simple motion that the Business Secretary called for and that the Deputy Prime Minister called for before the Eastleigh by-election. Indeed, the hon. Member for Bristol West (Stephen Williams) confirmed today that he could have written it himself, so one wonders why the Liberal Democrats cannot support it. One is helped to understand why they cannot do so by reading the rather entertaining amendment, the middle of which

“notes that the part of the Coalition led by the Deputy Prime Minister…advocates a mansion tax on properties worth more than £2 million, as set out in his party’s manifesto, and the part of the Coalition led by the Prime Minister does not advocate a mansion tax”.

We have a pushmi-pullyu Government, pushing in one way and pulling in the other. We have a real pantomime horse, as my hon. Friend the Member for Nottingham East said, from a pantomime Government, but this is not pantomime time. It is a serious time, and a serious time requires serious politics. The Liberal Democrats have an opportunity to stand by their principles—to stand on the side of honest, hard-working people—by coming into the Lobby this afternoon to support our motion, which could have been written by the hon. Member for Bristol West.

3.19 pm

Kelvin Hopkins (Luton North) (Lab): First, I apologise for arriving late for the debate. I had another commitment that was inescapable, but I want to make a contribution to this important discussion. I also congratulate the hon. Member for Eastleigh (Mike Thornton) on his election victory. I heard his maiden speech yesterday, and a very fine speech it was, too. Unfortunately, he left the Chamber—no doubt for a celebratory drink—before I had a chance to congratulate him, as it was my turn to speak. I remember that, on the day of the election, I was knocking on doors for the Labour party, as he would expect. We were delivering leaflets that said that it was a two-horse race. Sadly, Labour was not one of the two horses, but I was slightly comforted by the fact that the Conservative party was not one of them either.

Tax fairness is the subject of this debate, and I very much welcome the moves that our leadership is making in that direction. The decisions on the mansion tax and the 10p rate are important. They might be straws in the wind, but the wind is blowing in the right direction. The mansion tax is perhaps something of a slogan—an eye-catching, or thought-catching, idea—but I believe that property taxes are appropriate in a civilised society.

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Property has the advantage that it does not move, so we can always find it. As long as we can also find the owner, we can collect the taxes.

Property taxes, as with all taxes, have to be carefully designed. As the hon. Member for Broxbourne (Mr Walker) said, we have to be careful to ensure that such taxes are equitable. If there is inequity between regions, that should be looked at. The taxes have to be carefully designed to ensure that equity. Personally, I would like to go further and talk about a wealth tax. My party used to talk about that some years ago, and I would like to see a more general tax on wealth in order to do something about the grotesque inequalities in our society. Those inequalities have grown enormously during the time I have been active in politics. Had I been told when I was first active in my party in the late ’50s and early ’60s that we would be in this position now, I would not have believed it. We have moved in this direction, however, and it has been a retrograde step.

No doubt some hon. Members will have read a book entitled “The Spirit Level”, which identifies a strong correlation between income inequality and a whole range of social ills. I want to see a society that is much more equal in income terms, in order to reduce those social ills and because it is right in principle. It is interesting to note that that correlation applies in all societies, whatever the income levels. It does not just apply in rich societies or poor ones. In any society, income inequality correlates with greater social ills. I hope that when my party gets into office at the next election—that is when, not if—we will seriously address that question and try to make Britain a much more equal society again.

Tax has to be progressive. We have to tax the better-off, and we should tax the less well-off either very little or not at all. I have to say that I was disappointed in the previous Government. I was one of a small number of Labour Members—I think there were six of us—who voted against the abolition of the 10p rate, and I am delighted that our leadership has now chosen to reverse that decision and to put us back onside when it comes to looking after the less well-off. That decision is very welcome indeed.

Income tax is the most progressive form of tax. It is adjustable and, in the case of most people, it is collectable. Most of us are on PAYE, so there is no problem with collection. There is a problem, however, with collecting taxes from those who try to evade or avoid paying what is rightly due from them. We have heard from the tax justice movement, and from Richard Murphy in particular, an assessment that the tax gap is something like £120 billion. Some suggest that it could be even more than that. Even the Government accept that the figure is in the tens of billions. Small advances have been made in collecting that tax, but if were really to make inroads in that area, we would not need to look at changes in the tax rate because there would be so much more income to enable us to solve our problems.

Sheila Gilmore: We have heard a lot of the language around dealing with tax avoidance and with high-income earners. Does my hon. Friend not find it disappointing that, at almost the first opportunity to take action, the Chancellor went to Europe to argue against a cap on bonuses?

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Kelvin Hopkins: Yes, that was absolutely regrettable. I know that my party will commit to introducing a cap on bonuses in our first few days in power after the next election.

Mr Stewart Jackson: The hon. Gentleman always makes a powerful point. Having served on the Public Accounts Committee and on the ongoing inquiries into tax avoidance, I concur with him. I am a defender not of crony capitalism but of popular capitalism. He might not agree with me on that, being slightly on the left. In order to tackle corporate tax avoidance, we need to look at multilateral, bilateral, international and domestic legislation, but would he acknowledge that the previous Government flunked every opportunity to look at those issues over 13 years?

Kelvin Hopkins: We have seen successive Governments going in for what is called light-touch regulation on all fronts. I have never believed in light-touch regulation; I believe in tough regulation. I believe in employing thousands more tax officers to ensure that we collect the taxes. At the beginning of my time in Parliament, I visited our local VAT office, and the inspectors there told me that if they had more tax inspectors, they could collect billions more in tax. Each of those VAT inspectors collected more than five times their salary. I wrote about this to the Chancellor of the Exchequer at the time, and got a letter back from a civil servant saying that the Treasury was trying to reduce costs by reducing staffing levels. That was a completely illogical non sequitur; it was complete nonsense. Reducing the number of tax officers will reduce income by more than the amount of their salaries.

I have made the point many times—and I shall continue to make it—that we need more tax officers and more rigorous regulation. We need more control over what the corporates and the fat cats get away with. The reality is that ordinary working-class people have to pay tax through PAYE. They cannot escape paying their tax, but the corporates and the fat cats can. So, I have agreed with the hon. Member for Peterborough (Mr Jackson) on one or two issues, and I am pleased about that, although we have different philosophical views when it comes to economics.

I want to talk about the deficit problem, because that is what taxation is about. I do not think that we actually have a deficit problem. We do not even have a spending problem. We have a revenue collection problem. That can be addressed either by collecting tax in the way that we do now, or by changing tax rates, as proposed in today’s motion.

Tax collection is a serious problem, and we could make serious changes there, but I want to look back to a time when taxes were more progressive. During the previous Parliament, I made suggestions in this Chamber about the kind of tax changes that I wanted to see. I went beyond what our leadership is now suggesting, although I welcome its proposals. I think we should go further, however. In the 1970s, Denis Healey was Chancellor of the Exchequer. He said that he wanted to

“tax the rich until the pips squeak”.

I cheered him for that, and we did not lose any votes because of his statement. In fact, a lot ordinary working-class people said, “Quite right too! We want those who can afford to pay more to do so. Those who can only afford to pay less should pay less.”

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Mel Stride: Was Denis Healey the same Chancellor who had to go cap in hand to the International Monetary Fund in the 1970s because this country was bankrupt?

Kelvin Hopkins: He did indeed go to the IMF, but I think it has now been recognised that that was unnecessary. We did not need to kowtow to the IMF or to impose those strictures. In fact, remarkably, the economy survived quite well during that time, although a mistake was made at the end. I shall not go into that now, Mr Deputy Speaker, because you would call me to order if I did, but it was the reason why things went wrong in 1979. Nevertheless, we survived the 1970s, although the oil price rose by five times in a very short period, which affected the whole world including Britain.

At that time, I was working for the Trades Union Congress and then in the trade union movement. I was an economist, and was lobbying the Government. I was at the TUC General Council when the £6 pay policy was agreed to. That was an historic moment. I thought it amazing that the trade unions had agreed to a cap on pay increases for everyone, but the reason they agreed to it was that it was fair. Everyone would receive a £6 pay rise. For someone with a low income that was a big rise, while for someone with a high income it was not very much, but it was fair, and was seen to be fair across the board.

Other Members are too young to remember this, but in those days the top rate of tax was 83p in the pound, and there was also a 15% surcharge on unearned income. Some of those whose income was entirely unearned, perhaps in property, were paying a 98% rate on the top part of their income. I thought that was pretty fair, but of course we cannot go back to those days.

Sheila Gilmore: My hon. Friend has been revisiting the 1970s. A remarkable statistic is that in 1979, the inequality gap in this country was at its narrowest since the second world war. Perhaps, if we think that reducing inequality is a good thing, something was right at that time.

Kelvin Hopkins: Absolutely. I remember writing papers about the massive increase in inequality that occurred subsequently, during the 1980s, when there were big tax cuts for the rich along with rapidly rising unemployment. That resulted in the inequality for which we have not really been compensated since.

Mark Reckless: The hon. Gentleman has spoken of persuading Labour Front Benchers to adopt his policy on the 10p tax rate. Does he have similar hopes in respect of the 98% rate?

Kelvin Hopkins: No, no. I live in the real world, and I suspect that even my hon. Friends on the Front Bench will not start considering 98% marginal tax rates.

George Bernard Shaw, a witty man but a socialist, who was paying 98%, said, “I consider myself to be a tax collector for the Government, in return for which I receive a 2% premium.” I thought that that was one way of putting it. Shaw was, as I said, a socialist, who no doubt accepted that wealthy people such as himself should pay substantially more than the poor.

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I realise that we will not return to that rate, but I will say that during a Budget debate in the last Parliament, on a cold Thursday afternoon when it was raining and there were about six people in the Chamber, I suggested that we could consider a 50% rate for those on £60,000 a year—this was then!—a 60% rate for those on £100,000, and a 70% rate for those on £200,000. That would have taken us nowhere near where we had been in the 1970s, but it would have been a substantial change from where we were then.

I did not get much of a reaction in the Chamber, but the Deputy Speaker spoke to me privately afterwards. I am giving away no secrets, because she is no longer a Member of Parliament. She said, “I do so agree with you. Why do the Government not just do as you say?” Well, if only; but I had said what I thought, and I thought that would be a reasonable move. I suggested the 50% rate for those on £60,000 because at least it would mean Members of Parliament paying a tiny bit extra on the top part of their income. I thought that was right then, and I still think it is right.

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I fear that the hon. Gentleman has run out of time. Much as I was enjoying his speech, I must now call Catherine McKinnell.

3.32 pm

Catherine McKinnell (Newcastle upon Tyne North) (Lab): It is a pleasure to follow my hon. Friend the Member for Luton North (Kelvin Hopkins)

This has been a good debate on what is really quite a simple premise—that our taxation system should be based on fairness and equity—but there have been some disappointing, although I would also say unsurprising, contributions from Government Members. The Minister’s speech in particular seemed to confirm that the Government have their head in the sand when it comes to their disastrous economic policies and performance. Manufacturing has fallen by 3% since last year, business confidence and investment are plummeting, growth is flatlining, and the economy desperately needs some emergency care. Borrowing is going up, not down, and it is rising to pay the price of the Government’s failure. My hon. Friend the Member for Swansea West (Geraint Davies) described the position very passionately.

The hon. Member for Bristol West (Stephen Williams) complained bitterly that the Opposition had been stealing the Liberal Democrats’ policy. He now admits that it is his policy. In fact, he could have written it himself. I therefore still hope that the Liberal Democrats will go through the Lobbies with us today to support what will be a very measured step towards ensuring that the cost of deficit reduction is borne by those with the broadest shoulders as well as by those who can bear it least but who are, at present, bearing the brunt.

Mel Stride: The hon. Lady referred to the hon. Member for Bristol West (Stephen Williams), who asked a simple question of her Front-Bench team: will a mansion tax be in the next Labour party manifesto, yes or no?

Catherine McKinnell: We gave a simple response to that question—[Interruption.] First, we challenged the Minister to say what would be in the Government’s Budget next week. He will not specify that, so we are

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not able to announce at this stage what will be in our manifesto in two years’ time. If it is appropriate and a mansion tax will seek to deal with the mess that we anticipate this Government are going to leave this country’s finance in, it is certainly something we will consider.

Mel Stride: Is the hon. Lady seriously suggesting that just because a Minister will not make a serious breach of parliamentary protocol by leaking a Budget in advance she will not inform the House whether her party will have a mansion tax in its next manifesto?

Catherine McKinnell: No. That illustrates why the Government were not giving away what they are going to do in next week’s Budget, but we have said clearly that if we were in government now, we would not be cutting taxes for millionaires. We would be looking to put in place a mansion tax, which the Liberal Democrats would support, and we would be using that to take a measured approach to deficit reduction. Unfortunately, we are not in government. The Chancellor is presiding over a flatlining economy, so we are suggesting a way for him to try to get some growth back into the economy —we hope that the Liberal Democrats will support us today and proposals will come forward.

Jonathan Ashworth (Leicester South) (Lab): My hon. Friend should take no lessons from Conservative Members, because when they were in opposition they refused to specify—apart from supporting Labour’s spending plans—any of the policies that would be in their 2010 manifesto.

Catherine McKinnell: I thank my hon. Friend for his impassioned slap-down of the hon. Member for Central Devon (Mel Stride). What is clear from today’s contributions is the gap between what Labour Members—and, we hope, Liberal Democrat Members—believe to be the fair and right thing to do, and what many Conservative Members believe.

As I said, the Opposition motion is based on a simple premise: a mansion tax on properties worth more than £2 million should be part of a fair taxation system and used to fund a tax cut for millions of people on middle and low incomes. Let us be honest—I know that Government Members cannot stay in denial of this any longer—those people are finding that their household budgets are seriously squeezed. An increasing number of hard-working families up and down the country are reaching breaking point. A number of hon. Members gave heartfelt accounts of the difficulties that many of their constituents are facing: the rise in the use of food banks; the VAT increase; rising energy and fuel bills, rail fares; and other household budget difficulties.

Stephen Williams rose

Catherine McKinnell: I will give way to the hon. Gentleman because he has been mentioned twice.

Stephen Williams: The hon. Lady again mentioned the tax cut for millions of people on middle and low incomes, which is in the Labour motion and indeed the coalition Government’s alternative. Will she confirm that the tax cut in the Labour motion matches up with what the Labour leader said last month when endorsing

12 Mar 2013 : Column 210

our policy of a mansion tax and that the tax cut that Labour is talking about is reintroducing the 10p tax rate?

Catherine McKinnell: We have made Labour’s approach clear. We have said that we would like to fund a 10p tax rate for the lowest earners. We have not specified that that is what the Government should do with this; we have said that it should be used to fund a tax cut for those on low and middle incomes. So if the Liberal Democrats want to support us in the Lobby, they can then pressure the Government to use that money in any way they see fit.

So let me remind the House of the context of today’s debate. Many of our constituents are struggling to make ends meet, due to a combination of under-employment, stagnating wages, rising food, fuel and child care costs, and of course the Government’s hike on VAT. Our constituents will be further hit by a £6.7 billion cut in working-age benefits and tax credits over the next four years. [Interruption.] The Under-Secretary of State for Communities and Local Government, the right hon. Member for Bath (Mr Foster)—the Liberal Democrat Minister—is groaning but that is the reality for many families up and down the country. At the same time, we read of hundreds of bankers at different financial institutions, including one owned by the state, earning more than £1 million per year. We have a Chancellor seeking but failing to use his ever-diminishing influence in Europe to fight against proposals to limit bankers’ bonuses to “just a year’s salary”. We have a coalition Government who will give the 13,000 people in this country earning more than £1 million a year a tax cut of £100,000 next month. No wonder people are angry and no wonder our economy is not growing when ordinary people cannot afford to spend and invest. We—or, more accurately, the Prime Minister—heard only last week from the OBR that fiscal consolidation measures have reduced economic growth over the past couple of years.

Stewart Hosie: The hon. Lady is absolutely right that the tax cut for millionaires is dreadfully unfair, but can she explain why, when the Labour party had the chance, it failed to oppose the tax cut for millionaires?

Catherine McKinnell: These arguments have been rehearsed many times and we have made clear our absolute opposition to cutting the top rate of tax at this time while slapping charges on the poorest in society. No wonder the hon. Member for Harlow (Robert Halfon) has spoken of the Government’s need to neutralise claims that they cut taxes for the rich.

Let us look at the Opposition motion, because I think the Liberal Democrats are dancing on the head of a pin when they say that they cannot support it. It calls for the introduction of a charge on properties worth more than £2 million, a mansion tax that the Liberal Democrats have estimated would raise £2 billion. We say that it could be used to fund a 10p tax band of up to £1,000, benefiting 25 million basic rate taxpayers to the tune of £100. We believe that Liberal Democrat Members should put aside their loyalty to the Conservatives and vote in favour of a principle—the principle of tax fairness at a time when so little of it is in evidence from this Government.

12 Mar 2013 : Column 211

How could the Liberal Democrats do otherwise? Only last month, they made the introduction of a mansion tax the centrepiece of their Eastleigh by-election campaign. Recent media appearances have certainly suggested that they will support the principle, with the Business Secretary declaring that if the Opposition motion

“is purely a statement of support for the principle of a mansion tax I’m sure my colleagues would want to support it.”

Asked again at the weekend which part of the Opposition motion he disagreed with, the Liberal Democrat president, the hon. Member for Westmorland and Lonsdale (Tim Farron), replied, “None of it.” The former leader, the right hon. Lord Ashdown, declared that it would be “weird” if the Liberal Democrats voted against it. He is not the first person to call Liberal Democrats weird, but they have the opportunity to put that right today and to get on the road to normality by supporting their own policy.

Only yesterday, the hon. Member for Bristol West—I shall mention him one last time—said of the Opposition motion,

“I could have written it myself”,

yet today he complains that we have stolen his party’s policy. If such childishness gets in the way of the Liberal Democrats supporting their own policy in the Lobby, members of the public will be baffled and extremely disappointed.

Stephen Williams rose

Catherine McKinnell: I would give way, but I am running out of time.

We think that the Opposition motion presents those of us who believe in a fair and equitable taxation system with the opportunity to demonstrate that fact by voting in favour of it today. Will this be yet another example of the Liberal Democrats saying one thing to the electorate and doing something very different in government? What about their partners in crime—I am sorry, Mr Deputy Speaker, I mean partners in government—the Conservatives? We know that an increasing number of Conservative Members fear that they appear out of touch and that some, most notably the hon. Members for Harlow, for Camborne and Redruth (George Eustice), for Aberconwy (Guto Bebb) and for Cleethorpes (Martin Vickers), all of whom are noticeably absent from the Chamber, have argued that a way to counter that impression would be to reintroduce a 10p tax rate.

I have argued before that the best way to neutralise the impression that the Government are out of touch and only cut taxes for the rich is to stop cutting taxes for the rich, such as the millionaires’ tax cut that will take effect from April. I also acknowledge that it was a mistake to get rid of the 10p rate in 2007, although it enabled the 22p rate to be reduced to the 20p rate that is still in place today.

We believe that the best way to fund a new 10p tax band is through the mansion tax. Many right hon. and hon. Members have expressed concerns about how the mansion tax would work in practice, about how properties would be valued and about how people who live in £2 million properties but are apparently cash poor would pay. We have also heard, however, that the Treasury

12 Mar 2013 : Column 212

is drawing up detailed proposals for an annual charge on high-value residential properties owned by companies, partnerships or investment vehicles. It demonstrates that our plans—Liberal Democrat and Labour plans—for a mansion tax, an annual charge on high-value residential properties owned by private individuals, are entirely feasible, entirely realistic and entirely possible.

Our motion calls on the Government to bring forward proposals for a mansion tax, so that they can be considered in more detail by the House. The Opposition motion is simply expressed; it responds to Liberal Democrat concerns, and we still hope they will support us by voting for it. It calls for a tax on individuals fortunate enough to live in a high-value residential property, to support a tax cut for millions of hard-working low and middle-income families up and down the country at a time when they desperately need our support to put money back into household pockets and demand back into the economy. The motion provides all Members with the opportunity to demonstrate their support for a tax system based on fairness and equity, and I commend it to the House.

3.45 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster): I begin by thanking those Members who gave a welcome to my hon. Friend the Member for Eastleigh (Mike Thornton). I join them by adding my own welcome.

The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) is absolutely right. The debate may have been robust, but it was genuinely thoughtful. It is thus a great disappointment that when she closed the debate and the hon. Member for Nottingham East (Chris Leslie) opened it, they did not take the opportunity to apologise to the country for the Labour Government’s role in creating the economic difficulties in which we find ourselves. The hon. Member for Swansea West (Geraint Davies) was right too. On the Government Benches and in the country at large, we say “What a fine mess you’ve left us.”

I congratulate the Opposition on their proposal, because one good thing happened today: after three years of opposing our revenue-raising policies, three years of opposing our cuts and three years of failing to propose a single solution for the economic mess they left us, I am glad that in the Chamber today they have at last put forward an actual concrete policy. As we heard, it is a Liberal Democrat policy, but I am delighted that Labour Members now support our mansion tax. I shall be even more delighted when it takes pride of place in my party’s election manifesto in 2015—something I can say but they apparently cannot.

Geraint Davies: Will the Minister give way?

Mr Foster: Let me make a little progress and I will happily give way.

We have been perfectly up front: this is a matter on which the two parties in the coalition disagree. As my hon. Friend the Member for Bristol West (Stephen Williams) made clear in an excellent speech, the Conservatives have always been vocal in their opposition to such a scheme and Liberal Democrats have always been vocal in our support for it.

12 Mar 2013 : Column 213

Catherine McKinnell: May I put a suggestion to the Minister? If Liberal Democrat Members support the motion and the Government bring forward proposals, they would not need to include the scheme in their next manifesto.

Mr Foster: I may return to the hon. Lady’s comments in a second.

We are supportive of the motion because we agree with Adam Smith, the father of free market economics. He supported higher taxes on property to reduce taxes on more industrious endeavours. We think it unfair that the richest people in the country pay the same council tax on their multi-million pound palaces as a family in a three-bedroom house in the suburbs. We agree on that.

Both parties in the coalition have been open about our disagreement, but the Opposition’s attempt to drive a wedge between us is infantile. Both parties know where we stand, and the public are clear about it too. The hon. Lady has to remember that all coalition tax policy is made by agreement between the Conservatives and the Liberal Democrats, and the mansion tax is an issue on which we simply could not agree. However much Liberal Democrats want a mansion tax, we know that the country’s economic future would be in severe jeopardy if the coalition fell apart on this issue. The country’s future is far too important for us to engage in the Opposition’s petty political games.

Chris Leslie: On the point about putting the coalition first, to save us a great deal of time and effort, can the Minister tell us if there is any circumstance in which he envisages that he could ever support any motion tabled by the Opposition?

Mr Foster: As I said, this is the first time in three years that we have had any positive proposal from the Opposition in the Chamber. If the hon. Gentleman comes forward with further proposals to help deal with the economic mess that his Government left us, we will seriously consider them.

Sheila Gilmore rose

Mr Foster: No, I will not give way to the hon. Lady.

It is worth reminding ourselves that although we as Liberal Democrats accept that a mansion tax would be a further step in creating greater fairness, by being part of the coalition with our Conservative colleagues we have made huge strides towards building a fairer society and a stronger economy. I agree with the hon. Members for Edinburgh East (Sheila Gilmore) and for Scunthorpe (Nic Dakin), who said that creating fairness is vital. Our achievements in doing so are in marked contrast to those of the Labour Government.

Geraint Davies: Will the Minister give way?

Mr Foster: No.

The previous Government introduced the fuel duty escalator, hitting the pockets of families and businesses, whereas we have taken steps that will make pump prices 13p per litre lower than they would have been under Labour. They abolished the 10p tax rate, hitting 800,000 single earners, whereas we are taking 2.2 million people

12 Mar 2013 : Column 214

out of paying tax altogether. Whereas in 2000 they gave pensioners a miserable 75p a week pension increase, last year we gave the biggest ever increase of £5.30 a week.

Mr Dave Watts (St Helens North) (Lab): Will the Minister explain why he thinks it is fair that at the same time as they introduce the bedroom tax, the Government find money to give the richest people in the country a tax break?

Mr Foster: We are not here to discuss the under-occupancy arrangements. Let me remind the hon. Gentleman, who has breezed into the Chamber, that we have had discussions on many occasions about this. I am aware of 300,000-odd families with two or more spare bedrooms and 250,000 families who are overcrowded, so it is right and proper that we take action to try to help them out, and that is what we are doing. I am more than happy to talk about this Government’s record on fairness.

Geraint Davies: Will the Minister give way?

Mr Foster: No, I will not.

A number of speakers debated the 50p tax—[Interruption.]

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Mr Davies, you have spoken. It is up to the Minister when he gives way. It is not for you to keep reminding him, saying that he should give way.

Mr Foster: Thank you, Mr Deputy Speaker.

It is worth repeating yet again that the Opposition put the 50p tax rate in place for a whopping 36 out of their 4,758 days in power. As my hon. Friend the Exchequer Secretary made clear, a recent review showed that the additional rate is a distortive and economically inefficient way of raising revenue. So we have decided—sensibly, in my view—that it is neither efficient nor fair to maintain a tax rate that is not effective at raising revenue from high earners and risks damaging growth. That is why we have introduced a top rate of 45p, which will be higher than the top rate that existed under Labour for all but 36 days of their 13 years in office.

It is not true to suggest, as some have done, that the Government are not requiring the wealthiest to pay more. We have continually increased the tax contribution of the richest since the election. The 2010 Budget introduced a higher rate of capital gains tax; the 2011 Budget tackled avoidance through disguised remuneration; and the 2012 Budget increased stamp duty land tax to 7% on residential properties costing £2 million or more. We are also the Government who took action in the autumn statement to reduce the cost of pensions tax relief, and we introduced a 15% rate of stamp duty for properties owned through a corporate vehicle. I am grateful to my hon. Friend the Member for Rochester and Strood (Mark Reckless) for a number of suggestions of further measures that we can take in this area, which we will certainly consider, but I can confirm that if a property is taken out of a corporate envelope, SDLT will be paid in full.

As a result of the Government’s actions, the richest pay more tax on capital gains, more stamp duty on their homes, more tax on their pension contributions, and

12 Mar 2013 : Column 215

more on income tax. As the Institute for Fiscal Studies has confirmed, the rich are now paying a higher percentage of income tax than at any time under the previous Administration. Given our measures to boost compliance, more of the tax owed will be collected. I thank the hon. Member for Scunthorpe for his praise for our work in this area.

As well as making the wealthiest in society pay more, we are asking less of the poorest in this country. As the hon. Gentleman said, we are helping the hard-working families in this country. From April 2013, the income tax personal allowance will increase yet again by £1,335 in cash terms to £9,440. This change will benefit 24 million individuals, lift an additional 1.1 million out of income tax altogether, and provide a real-terms gain of £223 a year to basic rate taxpayers.

In total, the coalition’s actions since we came into office mean that 2.2 million people under the age of 65 will have moved out of paying income tax altogether, and there is a tax cut of £600 for more than 20 million people. We are proud of the way in which we are putting fairness firmly on the agenda. As the Secretary of State for Business, Innovation and Skills said earlier today, parties should be judged on what they deliver on fairer taxes, not on what they say about them. It is deeds not words.

The Labour party when in office failed to back our mansion tax proposals, and now we are not even clear whether it is willing to include a mansion tax in its 2015 manifesto. The Liberal Democrats have made it clear that we are in favour of such a scheme, but I urge my colleagues to support the Government’s amendment, which reiterates our party’s support for the mansion tax without putting the coalition Government at risk. It is the country’s economy and people that need a strong, co-operative and working Government, which this coalition Government are providing. The do not need a Labour party playing the exact kind of cynical political games that the public so revile. The hon. Member for Ashfield (Gloria De Piero) said that the public disliked infantile Punch and Judy politics. So do I, and that is why I urge the House to support the amendment.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

The House divided:

Ayes 241, Noes 304.

Division No. 179]


3.58 pm


Abrahams, Debbie

Ainsworth, rh Mr Bob

Alexander, rh Mr Douglas

Ali, Rushanara

Allen, Mr Graham

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Bain, Mr William

Balls, rh Ed

Banks, Gordon

Barron, rh Mr Kevin

Bayley, Hugh

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Blackman-Woods, Roberta

Blears, rh Hazel

Blenkinsop, Tom

Blomfield, Paul

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, Lyn

Brown, rh Mr Nicholas

Brown, Mr Russell

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Burnham, rh Andy

Byrne, rh Mr Liam

Campbell, Mr Alan

Campbell, Mr Ronnie

Caton, Martin

Champion, Sarah

Chapman, Jenny

Clark, Katy

Clarke, rh Mr Tom

Clwyd, rh Ann

Coaker, Vernon

Coffey, Ann

Cooper, Rosie

Cooper, rh Yvette

Corbyn, Jeremy

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Cunningham, Sir Tony

Curran, Margaret

Dakin, Nic

Danczuk, Simon

Darling, rh Mr Alistair

David, Wayne

Davidson, Mr Ian

Davies, Geraint

De Piero, Gloria

Denham, rh Mr John

Dobbin, Jim

Dobson, rh Frank

Doran, Mr Frank

Doughty, Stephen

Dowd, Jim

Dromey, Jack

Dugher, Michael

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Efford, Clive

Elliott, Julie

Ellman, Mrs Louise

Engel, Natascha

Esterson, Bill

Evans, Chris

Farrelly, Paul

Field, rh Mr Frank

Fitzpatrick, Jim

Flello, Robert

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Francis, Dr Hywel

Gapes, Mike

Gardiner, Barry

Gilmore, Sheila

Glass, Pat

Glindon, Mrs Mary

Godsiff, Mr Roger

Goggins, rh Paul

Goodman, Helen

Greatrex, Tom

Green, Kate

Greenwood, Lilian

Griffith, Nia

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Mr David

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harris, Mr Tom

Havard, Mr Dai

Healey, rh John

Hendrick, Mark

Hepburn, Mr Stephen

Hillier, Meg

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hoey, Kate

Hood, Mr Jim

Hopkins, Kelvin

Howarth, rh Mr George

Hunt, Tristram

Irranca-Davies, Huw

James, Mrs Siân C.

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Jowell, rh Dame Tessa

Joyce, Eric

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Khan, rh Sadiq

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewis, Mr Ivan

Llwyd, rh Mr Elfyn

Love, Mr Andrew

Lucas, Caroline

Lucas, Ian

Mactaggart, Fiona

Mahmood, Mr Khalid

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marsden, Mr Gordon

McCabe, Steve

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McCrea, Dr William

McDonagh, Siobhain

McDonald, Andy

McDonnell, Dr Alasdair

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McGovern, Jim

McGuire, rh Mrs Anne

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Meacher, rh Mr Michael

Meale, Sir Alan

Mearns, Ian

Miliband, rh David

Miliband, rh Edward

Miller, Andrew

Mitchell, Austin

Morden, Jessica

Morrice, Graeme


Morris, Grahame M.


Mudie, Mr George

Murphy, rh Mr Jim

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Nash, Pamela

O'Donnell, Fiona

Onwurah, Chi

Owen, Albert

Pearce, Teresa

Perkins, Toby

Phillipson, Bridget

Pound, Stephen

Powell, Lucy

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Mr Jamie

Reed, Steve

Reynolds, Emma

Reynolds, Jonathan

Riordan, Mrs Linda

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Mr Frank

Roy, Lindsay

Ruane, Chris

Ruddock, rh Dame Joan

Sarwar, Anas

Sawford, Andy

Seabeck, Alison

Shannon, Jim

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheridan, Jim

Shuker, Gavin

Simpson, David

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Nick

Smith, Owen

Straw, rh Mr Jack

Stringer, Graham

Sutcliffe, Mr Gerry

Tami, Mark

Thomas, Mr Gareth

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, Valerie

Walley, Joan

Watts, Mr Dave

Whitehead, Dr Alan

Williamson, Chris

Winnick, Mr David

Winterton, rh Ms Rosie

Woodcock, John

Woodward, rh Mr Shaun

Wright, David

Tellers for the Ayes:

Heidi Alexander


Phil Wilson


Afriyie, Adam

Aldous, Peter

Alexander, rh Danny

Amess, Mr David

Andrew, Stuart

Bacon, Mr Richard

Baker, Norman

Baker, Steve

Baldwin, Harriett

Barclay, Stephen

Barker, rh Gregory

Baron, Mr John

Barwell, Gavin

Bebb, Guto

Beith, rh Sir Alan

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Birtwistle, Gordon

Blackman, Bob

Blackwood, Nicola

Blunt, Mr Crispin

Boles, Nick

Bone, Mr Peter

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brooke, Annette

Browne, Mr Jeremy

Bruce, Fiona

Bruce, rh Sir Malcolm

Buckland, Mr Robert

Burley, Mr Aidan

Burns, Conor

Burns, rh Mr Simon

Burrowes, Mr David

Burstow, rh Paul

Burt, Lorely

Byles, Dan

Cable, rh Vince

Cairns, Alun

Cameron, rh Mr David

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Cash, Mr William

Chishti, Rehman

Chope, Mr Christopher

Clappison, Mr James

Clark, rh Greg

Clarke, rh Mr Kenneth

Clegg, rh Mr Nick

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Crabb, Stephen

Crockart, Mike

Crouch, Tracey

Davey, rh Mr Edward

Davies, Glyn

Davis, rh Mr David

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Dorries, Nadine

Doyle-Price, Jackie

Drax, Richard

Duddridge, James

Duncan, rh Mr Alan

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Jonathan

Evennett, Mr David

Fabricant, Michael

Fallon, rh Michael

Farron, Tim

Featherstone, Lynne

Field, Mark

Foster, rh Mr Don

Fox, rh Dr Liam

Francois, rh Mr Mark

Freeman, George

Freer, Mike

Fuller, Richard

Garnier, Sir Edward

Garnier, Mark

Gauke, Mr David

George, Andrew

Gibb, Mr Nick

Gilbert, Stephen

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, rh Damian

Grieve, rh Mr Dominic

Gyimah, Mr Sam

Hague, rh Mr William

Hames, Duncan

Hammond, rh Mr Philip

Hammond, Stephen

Hancock, Matthew

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Harvey, Sir Nick

Haselhurst, rh Sir Alan

Hayes, Mr John

Heaton-Harris, Chris

Hemming, John

Henderson, Gordon

Hendry, Charles

Herbert, rh Nick

Hinds, Damian

Hollingbery, George

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Horwood, Martin

Howarth, Sir Gerald

Howell, John

Hughes, rh Simon

Hunt, rh Mr Jeremy

Hurd, Mr Nick

Jackson, Mr Stewart

Javid, Sajid

Jenkin, Mr Bernard

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kennedy, rh Mr Charles

Kirby, Simon

Knight, rh Mr Greg

Laing, Mrs Eleanor

Lancaster, Mark

Lansley, rh Mr Andrew

Latham, Pauline

Laws, rh Mr David

Leadsom, Andrea

Lee, Jessica

Leech, Mr John

Lefroy, Jeremy

Leigh, Mr Edward

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Lewis, Dr Julian

Liddell-Grainger, Mr Ian

Lilley, rh Mr Peter

Lloyd, Stephen

Lopresti, Jack

Lord, Jonathan

Loughton, Tim

Luff, Peter

Macleod, Mary

Main, Mrs Anne

Maude, rh Mr Francis

May, rh Mrs Theresa

Maynard, Paul

McCartney, Jason

McCartney, Karl

McIntosh, Miss Anne

McLoughlin, rh Mr Patrick

McPartland, Stephen

McVey, Esther

Menzies, Mark

Mercer, Patrick

Metcalfe, Stephen

Miller, rh Maria

Mills, Nigel

Milton, Anne

Mitchell, rh Mr Andrew

Morgan, Nicky

Morris, Anne Marie

Morris, James

Mosley, Stephen

Mowat, David

Mulholland, Greg

Mundell, rh David

Munt, Tessa

Murray, Sheryll

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

O'Brien, Mr Stephen

Offord, Dr Matthew

Ollerenshaw, Eric

Opperman, Guy

Osborne, rh Mr George

Ottaway, Richard

Parish, Neil

Patel, Priti

Paterson, rh Mr Owen

Pawsey, Mark

Penrose, John

Percy, Andrew

Perry, Claire

Phillips, Stephen

Pickles, rh Mr Eric

Pincher, Christopher

Poulter, Dr Daniel

Prisk, Mr Mark

Pugh, John

Raab, Mr Dominic

Randall, rh Mr John

Reckless, Mark

Redwood, rh Mr John

Rees-Mogg, Jacob

Reevell, Simon

Reid, Mr Alan

Robathan, rh Mr Andrew

Robertson, rh Hugh

Rogerson, Dan

Rosindell, Andrew

Rudd, Amber

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shelbrooke, Alec

Shepherd, Sir Richard

Simpson, Mr Keith

Skidmore, Chris

Smith, Miss Chloe

Smith, Henry

Smith, Julian

Smith, Sir Robert

Soubry, Anna

Spelman, rh Mrs Caroline

Spencer, Mr Mark

Stanley, rh Sir John

Stephenson, Andrew

Stevenson, John

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Stunell, rh Andrew

Sturdy, Julian

Swales, Ian

Swayne, rh Mr Desmond

Swinson, Jo

Swire, rh Mr Hugo

Syms, Mr Robert

Tapsell, rh Sir Peter

Teather, Sarah

Thornton, Mike

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Truss, Elizabeth

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vara, Mr Shailesh

Vickers, Martin

Walker, Mr Robin

Wallace, Mr Ben

Ward, Mr David

Watkinson, Dame Angela

Weatherley, Mike

Webb, Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Willetts, rh Mr David

Williams, Mr Mark

Williams, Roger

Williams, Stephen

Williamson, Gavin

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Jeremy

Wright, Simon

Yeo, Mr Tim

Young, rh Sir George

Tellers for the Noes:

Mark Hunter


Greg Hands

Question accordingly negatived.