Question Time: Chancellor of the Exchequer

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DayneD89
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Order! Order!

Her Majesties Chancellor of the Exchequer, the Right Honorable Saunders16 will now take questions from the house


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Connor27
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Mr Speaker,

What does my right honourable friend think of the idea of flat taxation? And does he see it as feasible model for Britain going forward with regards specifically to income tax?

Saunders16
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Saunders16
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As an opening note, I am honoured to be speaking in a Question Time. I will do my best to answer as many questions as I can to the best of my ability. As a point of order, I will not be around for a small period this evening, so please be patient in my absence.

(Original post by Connor27)
Mr Speaker,

What does my right honourable friend think of the idea of flat taxation? And does he see it as feasible model for Britain going forward with regards specifically to income tax?

Saunders16
Mr Speaker,

I thank my right honourable friend for his question. Flat taxation is something I am favourable to as a libertarian; excessively progressive taxation treats wealth as something that must be treated as detrimental to society. I dispute the validity of this apprehension towards income inequality. We must all have something to strive for to incentivise us to work our way to the top.

However, we live in a modern society and I both recognise and appreciate the necessity to help those who are struggling through little fault of their own. I do not wish to return to the widespread poverty of the 19th century. A flat Income Tax is not yet feasible for two reasons. Firstly, such a large change would serve as a much greater tax cut for the rich, having the unfortunate side-effect of a sharp rise in poverty. Secondly, it is simply not compatible with fiscal conservatism.

At this point, a low, flat Income Tax is mutually exclusive with creating a budget surplus. It would create major problems for the Treasury. Instead, I would simply like to see lower taxes across the board in addition to a fairer and more sustainable Negative Income Tax. In the long run, a flat Income Tax alongside the Negative Income Tax would become my favoured solution. It is a matter of when rather than if it should be introduced, in my humble view. I do advocate for a flat Corporation Tax alongisde tax relief for small businesses, on the other hand. I see this as the correct time to pursue a flat tax in that area, but not Income Tax at this point.
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Mr T 999
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Mr Speaker

I like to ask the Chancellor Saunders16 would there be radical liberal policies in the budget?
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Saunders16
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(Original post by mr T 999)
Mr Speaker

I like to ask the Chancellor Saunders16 would there be radical liberal policies in the budget?
Mr Speaker,

At the risk of sounding boring, you really will have to wait till the budget comes out to find out. However, I will entertain this question to a certain extent. I can announce publicly that I, with the assistance of this government, have completed a large amount of the budget. The word-based side of it is almost completed, pending changes to any details included in it.

Furthermore, we intend to accompany this with spreadsheets noting our tax changes, and costings with sources provided where necessary. This government strives to achieve a high standard, despite the failure of the previous government and the difficult position we occupy. As for the contents of the budget itself, you should expect to see a pragmatic yet full proposal for a more liberal economy, with tax cuts and significant changes to all areas of the state.
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Saracen's Fez
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Does the Chancellor of the Exchequer intend to make changes to business rates?
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Jammy Duel
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Mr Speaker, The Rt. Hon. Gentleman claims that a flat of income tax is impractical for two reasons, it has been explained to him at least once before how it can be done without these issues, would he like it explaining again?
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Mr T 999
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(Original post by Saunders16)
Mr Speaker,

At the risk of sounding boring, you really will have to wait till the budget comes out to find out. However, I will entertain this question to a certain extent. I can announce publicly that I, with the assistance of this government, have completed a large amount of the budget. The word-based side of it is almost completed, pending changes to any details included in it.

Furthermore, we intend to accompany this with spreadsheets noting our tax changes, and costings with sources provided where necessary. This government strives to achieve a high standard, despite the failure of the previous government and the difficult position we occupy. As for the contents of the budget itself, you should expect to see a pragmatic yet full proposal for a more liberal economy, with tax cuts and significant changes to all areas of the state.
I would like to ask the right honourable gentleman what are your plans for VAT and how much you think this will cost?
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The PoliticalGuy
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Will the right honourable chancellor agree with me that low corporation tax is essential to encouraging small businesses and employment. Also, what are this governments plan towards corporation tax?
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WobblyBovine
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Mr Speaker,

How does the Right Honourable Gentleman intend to draft a budget in the very limited time we have left this term?
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Does the Chancellor have any plans to close the tax gap and if so could he give us some details on these plans?
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Aph
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Mr speaker,

I think we can all agree that no one could make money and accumulate wealth without the states intervention, indeed it’s the state that actually physically makes money in the first place. Thus, would the chancellor agree with me that it isn’t right that individuals and businesses using our infustructure, our legal systems and our people not paying their fair share and hiding their money away in foreign banks is not only immoral but should be punished to the fullest extent?! And if so, may I ask him what he intends to do to stop this outrageous practice and make sure everyone pays their fair share?
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Saunders16
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Mr Speaker,

Thank you to all who have asked questions of me so far. I will be answering no further questions this evening, but I will be back to answer any other questions tomorrow night presuming circumstances do not change.

(Original post by Saracen's Fez)
Does the Chancellor of the Exchequer intend to make changes to business rates?
As always, there is a large difference between what I wish to do in principle and what I can do in practice, noting that a priority of this government is reducing the budget deficit. In the long run, I would love to see business rates abolished altogether. It is a tax that is considerably harmful to businesses, and does not receive the press it deserves, in a similar manner to National Insurance. However, the priority of this government is looking at Corporation Tax and finding ways to address issues in that area first, which I will be addressing in my answer to The PoliticalGuy.

(Original post by Jammy Duel)
Mr Speaker, The Rt. Hon. Gentleman claims that a flat of income tax is impractical for two reasons, it has been explained to him at least once before how it can be done without these issues, would he like it explaining again?
With all due respect, you will be free to make the changes you see ideal to Income Tax when and if you become Chancellor of the Exchequer. I, however, disagree with your belief that it would be correct to implement a flat rate at this current point. It is my belief and the belief of my colleagues that it would be safer for our economy and working people to make significant yet less noteworthy changes. Indeed, through the changes we will be proposing, I expect we will be closer to the point where a flat rate would become a more reasonable option. I will be happy to hear your justification for it at that point.

(Original post by mr T 999)
I would like to ask the right honourable gentleman what are your plans for VAT and how much you think this will cost?
I will preface my reply by stating that this is not an area this government has fully formed a policy in. We are all committed to making VAT easier to bear for less well-off people, but there are several ways we can go about it. Consequently, it has been something we have discussed heavily thus far and we are in the process of choosing the way in which we will decrease the burden of the taxpayer.

In our Queen's Speech, the Prime Minister highlighted his intention to tackle VAT in pubs. Estimates suggest that making pubs exempt from VAT would cost £3.6 billion, a small price to pay for the security of a treasured industry. In addition, the Prime Minister highlighted his intention to reduce it in all sectors. Any change will need to be funded by changes in other areas, leaving us to choose between a small reduction to the Standard Rate or a VAT rebate for consumers. We are close to formulating our policy and I look forward to propsing a meaningful change for the public.

(Original post by The PoliticalGuy)
Will the right honourable chancellor agree with me that low corporation tax is essential to encouraging small businesses and employment. Also, what are this governments plan towards corporation tax?
I most certainly agree with the right honourable member that we must have a low Corporation Tax to encourage small businesses and employment. Furthermore, I also believe it is important to lessen the burden on large corporations in order to encourage them to enter the country and stay in it. It must be noted that they possess the resources to move elsewhere very easily in the modern economy, and therefore Corporation Tax is required to be low for all businesses regardless of size to protect employment. We are pursuing an exemption for the smallest businesses, tax relief for small-to-medium businesses and a flat rate of tax for any other businesses. It is our intention that these changes are to be as close to being cost netural as possible, with our current calculations showing that the reforms we are pursuing will leave the vast majority of our businesses, including those most at risk of collapse and leaving the country, with a lessened tax burden.

(Original post by JellyMilk)
Mr Speaker, How does the Right Honourable Gentleman intend to draft a budget in the very limited time we have left this term?
Quite simply, because I have already used the opportunities I have had to get as much work done on the budget as I possibly could. While I hold duties within my own party, I have otherwise been fully concerned with making up for the three months we have missed as a government and have not yet been looking at any further legislation. Please see my reply to mr T 999 as for an update on how the budget is doing.

I will, however, entertain the House's curiosity further by stating that the word count is currently at 2500 and that costings are now the priority. This will mean that I am now able to focus on other matters, like helping my colleagues with legislation and preparing my own. I am confident that the budget is ready to be released this term, but a Finance Act is all but certain if that is not possible. I highly doubt that any other government before us has been as productive when it has come to the issue of the Trasury.

(Original post by Joep95)
Does the Chancellor have any plans to close the tax gap and if so could he give us some details on these plans?
(Original post by Aph)
Mr speaker,

I think we can all agree that no one could make money and accumulate wealth without the states intervention, indeed it’s the state that actually physically makes money in the first place. Thus, would the chancellor agree with me that it isn’t right that individuals and businesses using our infustructure, our legal systems and our people not paying their fair share and hiding their money away in foreign banks is not only immoral but should be punished to the fullest extent?! And if so, may I ask him what he intends to do to stop this outrageous practice and make sure everyone pays their fair share?
Other governments will give the obvious answer and state that they will challenge tax evasion and even exemptions, but this is not a priority of this government with three months to go and I will not insult people by claiming we wish to make any radical change in this area. However, our tax cuts across the board will assist with closing the tax gap. I dispute the idea that tax is fair if it is causing businesses to fall and employees to lose their jobs.

It is simply logical that, when tax is too high for people to cope with, they will find ways to pay less and keep more of what they have earned. There are already measures in place to deal with illegal practices, but taking away the problem of tax that is too high is just as valuable as the current measures of punishing those that cheat the system. Details of the changes we are making have been hinted towards and at points more closely outlined in my replies to other members of the House.
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Saracen's Fez
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(Original post by Saunders16)
As always, there is a large difference between what I wish to do in principle and what I can do in practice, noting that a priority of this government is reducing the budget deficit. In the long run, I would love to see business rates abolished altogether. It is a tax that is considerably harmful to businesses, and does not receive the press it deserves, in a similar manner to National Insurance. However, the priority of this government is looking at Corporation Tax and finding ways to address issues in that area first, which I will be addressing in my answer to The PoliticalGuy.
As the Chancellor will be aware, business rates were discussed in the Labour-Libertarian coalition negotiations. Will the Chancellor agree, as he did in those negotiations, to back Labour's plan and manifesto commitment to allow local authorities to set their own business rates when we bring a bill forward to do just that?
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Connor27
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Mr Speaker,

I thank the chancellor for his reply to my first question.

As my second question, I would like to ask him about monetary policy.

Does my right honourable friend see the merit in a free banking system of monetary policy as employed in Scotland in the 19th century, as opposed to our current central banking system?

To me, it is quite clear that the effective monopoly on interest rates held by central banks is highly inflexible, and this often exacerbates the impact of bust periods as shown by the works of Professor Hayek on illustrating the impact of low interest rates on busts (they often depress economies as we saw in the 2008 crash and the failure of banks to respond effectively to the failure of securitisation.) A free banking system would remove this inflexibility and better mitigate the impact of bust periods.
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robc2
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Good morning Mr Speaker,

To ask the chancellor what his opinion is on the minimum wage and living wage.
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username1450924
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Mr Speaker

Can I congratulate my right honourable friend on his appointment to second lord of the treasury. I am sure he will do a great job and I look forward to working with him from the back benchers. Can he confirm to the house that this Government is not looking to make any widespread cuts to public services?
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barnetlad
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Mr Speaker,

I ask the Chancellor if he plans to abolish VAT on sanitary products?
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Saunders16
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Mr Speaker,

Once again, thank you for the questions asked by this House. I hope to answer them as fully as possible and to the best of my ability.

(Original post by Saracen's Fez)
As the Chancellor will be aware, business rates were discussed in the Labour-Libertarian coalition negotiations. Will the Chancellor agree, as he did in those negotiations, to back Labour's plan and manifesto commitment to allow local authorities to set their own business rates when we bring a bill forward to do just that?
(Original post by robbiecee2)
Good morning Mr Speaker, To ask the chancellor what his opinion is on the minimum wage and living wage.
Firstly, allow me to answer Saracen's Fez, as these two questions link as you will see. I do indeed remember the discussion of business rates in our coalition negotiations with the Labour Party. The government does not hold an explicit stance on this issue, as we do not find it to be a priority in comparison to the other issues we intend to raise in the budget. However, it is something I hold a large amount of personal support for. Secondly, linking to the minimum wage, devolving it to local authorities is also something I hold a large amount of personal support for. Neither are immediate issues and I would not expect to see legislation from the government on either issue, but I expect these are two ideas that would also receive support from some of my colleagues.

(Original post by Connor27)
Mr Speaker, I thank the chancellor for his reply to my first question. As my second question, I would like to ask him about monetary policy. Does my right honourable friend see the merit in a free banking system of monetary policy as employed in Scotland in the 19th century, as opposed to our current central banking system? To me, it is quite clear that the effective monopoly on interest rates held by central banks is highly inflexible, and this often exacerbates the impact of bust periods as shown by the works of Professor Hayek on illustrating the impact of low interest rates on busts (they often depress economies as we saw in the 2008 crash and the failure of banks to respond effectively to the failure of securitisation.) A free banking system would remove this inflexibility and better mitigate the impact of bust periods.
We had a bill on the matter a while back and the short answer is that I stand somewhere in between both systems. I support the existence of the Bank of England, I support its independence and I support its control over interest rates. While I am sympathetic to the works of Professor Hayek in opposition to its monopoly, we must appreciate that it also provides a level of stability to the economy by keeping a firm grip over spending. Consequently, it is in other matters that I would like to see the power of central banking reduced, but most certainly not abolished. One way I believe this can be done is by eliminating its monopoly over the issuance of currency. I must clarify that I am speaking in a personal capacity and not on behalf of the government or my party.

(Original post by Tommy1boy)
Mr Speaker Can I congratulate my right honourable friend on his appointment to second lord of the treasury. I am sure he will do a great job and I look forward to working with him from the back benchers. Can he confirm to the house that this Government is not looking to make any widespread cuts to public services?
I appreciate the kind words offered by the right honourable member and I also look forward to working alongside him for the remainder of the term. I can indeed confirm to the House that this government is not looking to make any widespread cuts to public services. However, I can also confirm to the House that this government is looking at ways to reduce the budget deficit and pursue a surplus in the long-run, which will require cuts. It is my intention to do so in a responsible manner, noting the importance of austerity while balancing that with the necessity of well-functioning public services. We will be looking at ways to makes cuts without undermining the services they provide, such as changing funding formulas, eliminating areas in which money is wasted and lowering investment where it can be more useful in other areas.

(Original post by Lady Britannia)
What is the Chancellor's thoughts on the welfare budget?
In the debate following this government's Queen's Speech, I argued that there are two directions for our welfare system to go in. The first is a radical increase in welfare expenditure, through a tax-and-spend approach and prioritising assistance over incentivising people to work. I do not believe this system is desirable, sustainable and certainly not consistent with this government's intention for the tax burden to be lowered and national debt to be challenged. The second is reforming it in the image of Milton Friedman, introducing a variant of the Negative Income Tax he supported. This would entail money being a reward for work that recipients could spend how they wish, rather than money being allocated only to certain aspects of their life. This change would grant those on welfare greater opportunity to find their own way out of poverty, reducing the welfare trap and increasing social mobility. Furthermore, it would change the awful level of bureaucracy we currently see. This, unlike the first direction, would be sustainable and it is my belief and the belief of this government that it is the correct direction to go in.

(Original post by barnetlad)
Mr Speaker, I ask the Chancellor if he plans to abolish VAT on sanitary products?
I direct the right honourable member to B841. This government has no intention of doing any such thing, in accordance with our intention to reduce the VAT burden.
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Jammy Duel
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(Original post by Saunders16)
With all due respect, you will be free to make the changes you see ideal to Income Tax when and if you become Chancellor of the Exchequer. I, however, disagree with your belief that it would be correct to implement a flat rate at this current point. It is my belief and the belief of my colleagues that it would be safer for our economy and working people to make significant yet less noteworthy changes. Indeed, through the changes we will be proposing, I expect we will be closer to the point where a flat rate would become a more reasonable option. I will be happy to hear your justification for it at that point.
Mr Speaker, given the implementation of a truly flat tax system would require the abolition of any and all reforms that he pushes as part of the abolition of all currently existing personal taxation, and so far the reforms that we know about would do nothing to change taxation anyway other than renaming some things, what is the need for the delay? Is it the chancellor's lack of belief in the system, his lack of ambition, or the rest of the government?
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