I do not know whether the great British public have reached that conclusion. Perhaps some of them believe some of the arguments put by the Labour party, but if they do I have to point out some of the weaknesses. In the Committee of the whole House, the hon. Member for Pontypridd (Owen Smith), who previously spoke for the Opposition on this issue, said that he considered the taxable income elasticity calculations in the report to be “smoke and mirrors”. We would call them analysis and economics.
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Part of the reason for the lower than expected revenue from the 50p rate is that expectations were simply set too high by the previous Government. A more moderate view allows us better to predict the revenues from a 45p rate, and the analysis undertaken by HMRC states that the cost to the Exchequer of a reduction to 45p is about £100 million.
The 50p rate has been criticised by business. It has risked lasting damage to the UK economy and has raised considerably less than expected for the Exchequer, potentially even costing rather than raising revenue. Change is needed, but it must build on the evidence. We now have a more informed view of the behavioural impact of the additional rate—one fully endorsed and accepted by the Office for Budget Responsibility as central and reasonable.