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Finance (No. 4) Bill

It is important that the House is clear about what is being proposed. What we are proposing is a limit, on what are currently uncapped tax reliefs, of £50,000 or a quarter of someone's income, whichever is the higher; so someone earning £10 million a year can still receive tax relief on donations of £2.5 million to charity each and every year. However, as I say, we will discuss this with philanthropists and charities—indeed, those discussions are ongoing. Some features of the American system, for example, may be attractive, which we will certainly examine and consider as part of that process. The basic principle that the wealthiest in the land should pay a fair proportion of their income in income tax must be absolutely right, not least because last week we published data showing that last year some of the wealthiest people in the country had reduced their tax bills to below the basic rate of income tax. That is the system that was in place when Labour was in power. I think Opposition Members should have a bit of humility about that, because it means that some millionaires are paying a lower rate of income tax than people earning £20,000 a year. That is why it is fair that we cap tax reliefs, and, in the same way, it is right that we cap benefits. It is right and proper to ensure that the wealthiest in the country should pay a fair share of their income in tax, and that is exactly what we will do.