Income Tax (Hansard, 2 March 1995)

§ 1. Mr. Hendry
To ask the Chancellor of the Exchequer what plans the Government have to extend the 20 per cent. income tax band.

§ The Chancellor of the Exchequer (Mr. Kenneth Clarke)
The Government are committed to low tax rates, and will continue to move towards a 20 per cent. basic rate of income tax when it is prudent to do so.

§ Mr. Hendry
I am grateful to my right hon. and learned Friend for that answer. Will he confirm that 5 million people now pay tax at the lower 20 per cent. rate? Does he agree that an extension of the 20 per cent. rate is a clear example of the way in which Conservative tax cuts help those on lower incomes, especially pensioners, as well as all other groups in society?

§ Mr. Clarke
I agree entirely with my hon. Friend. As he says, the 20 per cent. band has been widened every year since it was introduced, and nearly 5.5 million taxpayers now pay tax of only 20 per cent.

§ Mr. Gordon Brown
On the taxation of income of executive share options and the abuses in the privatised utilities, on Tuesday the Prime Minister threatened legislation, and on Wednesday the Secretary of State for Employment, the President of the Board of Trade and, indeed, the Chancellor rebuffed it. Will the Chancellor admit that he was wrong in ruling out legislation in the past? Give that 150 directors of privatised utilities have £100 million in shares—

§ Madam Speaker
Order. I have had occasion earlier this week to call attention to the fact that a supplementary question was not related to the substantive question on the Order Paper, which today concerns the 20 per cent. 1166 income tax band and its extension. Would the hon. Gentleman care to relate his question directly to the substantive question on the Order Paper?

§ Mr. Brown
On the loss of income tax revenues because of what happens in the case of executive share options, will the Chancellor tell us that in the Budget Finance Bill he will introduce new measures to curb executive share options and tax them as income?

§ Mr. Clarke
I have just told the House that 5.5 million people now pay tax at only 20 per cent. The hon. Gentleman has so little to say on behalf of the Opposition about reducing the burden of tax on those on lower incomes that he keeps dragging out his complaints about a handful of people whom we are all agreed have taken too much out of the industries for which they work.
My right hon. Friend the Secretary of State for Employment and I spoke yesterday. I did not see what my right hon. Friend the President of the Board of Trade said, but I assume we all said what the Prime Minister said on Tuesday. I certainly did, and so did the Secretary of State for Employment. The Greenbury committee has been set up and has promised to report to us with recommendations on how best practice can be improved and on any measures that need to be taken. We all agree that the Government will certainly take whatever action is necessary when we have the Greenbury report.
The hon. Gentleman is using his protracted concern about the share options of a handful of people to disguise the fact that he has nothing whatever to say about the total burden of taxation on ordinary men and women.