The Finance Bill is being debated in parliament and is now at the committee stage. This is where MPs discuss the bill in detail and consider possible amendments.
The Finance Bill is how the Chancellor puts his budget into practice. So in the committee we will be discussing the 50% top rate of tax, the big cuts in capital allowances for small businesses and the change to fuel duty.
The tax on fuel duty is a big issue for many people in Sefton and the price of petrol and diesel has hit people and businesses hard. The finance bill will consider the duty on fuel but not the VAT which has already gone up. I will be raising this issue in the committee.
In the 2011 Budget, George Osborne said that he would continue with the 50p tax rate this year because it would be wrong to cut taxes on people earning more than £150,000 while others on much lower incomes were making "sacrifices". I agree with this approach although I also think it would be fairest to raise more tax from the bankers who are responsible for the financial crisis.
The Daily Telegraph reports that the Chancellor plans to scrap the 50p tax rate just before the next election to bribe the voters. Not many people in Sefton Central will benefit from that tax cut. My concern at the report in the Telegraph is that on the one hand the government says it is keeping tax rates high to cut the deficit and on the other hand they plan to cut tax for the wealthy before the deficit has been reduced.
The chancellor can't have it both ways.
He says reducing the deficit is his number one priority but this cannot be true if he plans to cut taxes to the wealthiest in our country. 18,000 people in the North West pay the highest rate of tax. 275,000 across the country pay this rate of tax. These people may well benefit from tax cuts while the overwhelming majority of the population have no benefit from tax cuts.
This is not a fair way to tackle the deficit and the cut in taxes if made too early will harm our ability to reduce the deficit.
If the Daily Telegraph is right, the government does not actually plan to cut the deficit. They want to offer their voters tax cuts before the election.
Evidence, if needed that we are not all in this together.