Of course, we have consulted on this policy and have listened very carefully to the representations we have received. If we are serious about raising revenue in a way that does not damage the economy, the cap on reliefs is a sensible approach. It is a matter of fairness and I would have thought that hon. Members from all
parties would agree that it is wrong for us to have a system whereby people can drive down their tax bill year after year to very low rates despite being high earners. That is exactly what this measure is about.
The measure demonstrates that as a Government we are doing more to raise money from the wealthy. In Budget 2010, we increased higher rate capital gains tax; in Budget 2011, we tackled avoidance through disguised remuneration, which was opposed by the Opposition; in Budget 2012, we raised stamp duty on high-value homes; in the autumn statement 2012, we took action to reduce the cost of pensions tax relief; and in Budget 2013 we announced further measures to tackle offshore tax evasion by high earners. Under this Government, the richest now pay more in income tax than in any year under Labour.
Amendment 1 requests a review, and HMRC published a thorough and very well-researched report at Budget 2012 that showed the effect of the additional rate of income tax. Those matters were debated at considerable length last year and the report shows that the rate was not raising the money that the previous Government intended it to raise. It is illogical to maintain a tax rate that is not effective at raising revenue from high earners and that risks damaging growth. We have found better ways of raising money from the wealthy that raise more money but do less damage to the economy.
We always keep tax rates under review, but I note the inclusion of a request for a review in the amendment. It seems to me that the purpose of the amendment is not just to enable us to have another debate on the 50p rate today but to enable the Labour party to find an escape route from its policy. Until a few days ago, it was against getting rid of the 50p rate. Labour will not answer the question, however, of what it will do at the next election. Its holding position is clearly that it will have a review. The Labour party knows that to go into the next election campaigning for an increase to the 50p rate would simply underline that it is anti-enterprise. It knows such an increase would damage the economy and is trying to find an escape route. Despite all the bluster in all the speeches we have heard today, Labour will not confirm that that is the policy it supports. It is all about posturing, not about practicality. That is why they did not have a 50p rate when they were in government and why they are trying to slip away from it now, hoping that no one will notice. I recommend that clauses 1 and 16 and schedule three stand part of the Bill and we hope that they will have all-party support.