Oral question asked in the House of Lords, by Lord Forsyth of Drumlean (Conservative). It was answered on Thursday, 28 October 2010.

Taxation: Deficit Reduction

Question: My Lords, will my noble friend confirm—as I think the noble Lord, Lord Myners, did before the election—that the actual revenue from increasing the top marginal rate of tax to 50 per cent is very much less than was anticipated? Is that the case? Will he also confirm that the lesson of the 1980s, and of the experience of other countries around the world, is that if you want the rich to pay more in taxes, you do that by cutting rates, not increasing them?

Answer: I am very grateful to my noble friend. I completely agree with his sentiments. This is not a Government who believe in medium and long-term high marginal rates of taxation. We have to incentivise the private sector to go out and generate wealth in order to deal, among other things, with the rebalancing of the economy which is now so necessary.

Secondary information