Article written by Martina Bet and published in the print version of The London Evening Standard.
Conservative former minister John Penrose praised Chancellor Rishi Sunak for the changes to the taper rate announced in last week’s Budget, he urged the Government to go further towards a Nigel Lawson-esque kind of tax system, which would see all income taxed equally.
He told MPs: “One of the people who I admire most in the Conservative Party’s long and illustrious history is Nigel Lawson and he said when he cut top rates of tax from somewhere in the 90% down to 40% or 45%, he said ‘look there is a point here about work incentives, you cannot expect people to work their socks off and then have the Government swipe it all because the Government believes it can spend the money better than they can’.
“He was right. The point is, of course, that if he is right for the best paid, for the most well-off, he must also be right for the least well-off , too. And therefore, the effect on work incentives for this particular tax cut, this reduction in the taper rate for Universal Credit, is particularly welcomed because of the effect it is going to have on the work incentives of the least well-off in our country.”
Mr Penrose noted he hopes the Government will be looking at the effects of other taxes.
He added: “As a result, I believe this is a vital step in what I hope will be the beginning of a long journey to head us towards a Nigel Lawson-esque kind of tax system, which will say it should not matter whether or not you are getting money from your earning, unearned income or from benefits, they should all be treated the same as income.”