Repeals

Part of Schedule 17 – in the House of Commons at 10:16 pm on 11 March 1997.

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Photo of Mr Christopher Gill Mr Christopher Gill , Ludlow 10:16, 11 March 1997

It is customary on Third Reading for a Back Bencher to pay tribute to the Standing Committee for all its hard work. It has been customary for a year or two for me to pay that tribute. It is also customary for me to talk about capital taxation and, once again, to express disappointment that the Budget does not abolish capital gains tax and inheritance tax. I have often pointed out that capital is the lubricant of a capitalist economy. It is wrong that we should continue capital taxes.

In the current year, capital gains tax will raise £900 million for the Treasury, after reliefs and allowances, which cost the Treasury £600 million. A tax with the potential to raise £1.5 billion has raised only £900 million. That is without counting the cost of the time and energy of the experts who have been involved in guiding people who wish to save tax on this account through the minefield of the legislation. I submit again that too many of our best brains are employed in trying to find ways around capital taxes, and that they could be better employed in creating more wealth in the economy. I hope that Ministers will look again at the question of capital taxation, which is repeatedly instanced by the wealth-creating sector of our economy as a brake on the effectiveness of that sector and should be abolished.

I greatly welcome the reduction in the standard rate of tax to 23p in the pound. That means that, in April this year, it will be a whole 10p less in the pound than it was under the Labour Government in 1979.