Wealthy must pay their fair share, says Jo

In the House of Commons this week, Jo pressed the Government to crack down on tax avoidance to make sure the wealthiest pay their fair share toward tackling the deficit.

Answering a question from Jo on tax avoidance, the Treasury Minister, David Gauke, revealed that changes to the tax system introduced under Labour resulted in £1 billion per year in tax avoidance. Jo urged the Government to do more to tackle these tax loopholes.

Commenting, Jo said:

“When they lowered capital gains tax, Labour created an enormous tax loophole which benefited mostly the richest people in society. That is why the Liberal Democrats pledged to introduce changes to capital gains tax and I am delighted that this has now been achieved. At a time when we are all having to face tough choices, it is especially important that the wealthiest in our society pay their fair share.”

The text of Jo Swinson’s question appears below:

Jo Swinson (East Dunbartonshire)

What assessment he has made of the level of tax avoidance during the period when the rate of capital gains tax was at 18%.

David Gauke (HM Treasury)

The Government estimate that prior to the emergency Budget, upwards of £1 billion of income tax revenues was forgone through income being turned into capital gains.

Jo Swinson (East Dunbartonshire)

I thank the Minister for that reply, which shows that when the previous Labour Government reduced capital gains tax, they created an enormous loophole for tax avoidance for the wealthiest in our society. Does he have any further plans to clamp down on tax avoidance, to ensure that the wealthy pay their fair share?

David Gauke (HM Treasury)

There are measures contained in the Finance Bill, which we are currently debating, that will reduce tax avoidance. We take the issue seriously, but the hon. Lady puts her finger on one of the problems. There were a number of structural difficulties in the tax system as it was left to us, one of which was the wide disparity between income tax rates and capital gains tax rates, and we have been able to do something about that.

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