The hon. Gentleman makes an excellent point that supports my argument.

The second canard in play here is that Clause 6 represents the best intentions of good government in implementing a desirable tax simplification. This figment also crept bashfully on to the record on 24 January when the Chancellor announced:

"I am trying to simplify the tax system, which is something that people in the House and outside have asked successive Chancellors to do."—[ Hansard, 24 January 2008; Vol. 470, c. 1635-6.]

The Chancellor has apparently convinced himself that he was merely being responsible and responsive to the House, or perhaps the new clutch of special advisers from next door in No. 10 have convinced him. Indeed, the Chancellor is setting new records in responsiveness to the House, given the sheer number of times that he has had to come to the Dispatch Box to apologise, explain and dilute.

What the Chancellor is not doing, and what the Government have so signally failed to do while in office, is simplify our tax law. I need point no further than the 1,148 pages of explanatory notes, in four volumes, that accompany this year's two volume Finance Bill. Perhaps the Government should look at offsetting the carbon cost of printing it. But only a Labour tax simplification could introduce new complexity, as we saw last week with the other major "simplification" in the Bill that has gone a little awry.

In the spirit of both those supposed simplifications, it might be worth dwelling a little on the question of winners and losers. Richard Mannion, writing in the journal of the Chartered Institute of Taxation, put the point quite simply:

"While any significant regime change like this would be likely to result in both winners and losers, the main losers on this occasion were business owners and entrepreneurs, the very people that the previous chancellor had set out to encourage with the effective CGT rate of 10 per cent. on business assets."

Once again, it is not so much a question of whether there are losers but of who the losers are.

The Government's erosion of competence has been matched by the erosion of confidence in their handling of business taxation. As John Wright, chairman of the Federation of Small Businesses, has said, the botched CGT changes have

"seriously eroded small businesses' trust in the government."

So, if, "Start as you mean to go on" is not exactly a guiding light for the Chancellor, perhaps he should stick with, "If it ain't broke, don't fix it."

The UK is in the throes of a liquidity crisis in the wholesale markets, which is severe enough to warrant billions of pounds of taxpayer-backed Intervention from the Bank of England. One of the side effects of the liquidity crisis is the potential impact on retail investor confidence as investors fall back on safer, more liquid investments. In the middle of that turmoil, the Government are doing away with a tax relief that was designed to encourage people to invest over the long term in relatively illiquid asset classes, such as unquoted shares, family businesses or venture capital enterprises.

We should not forget that the Prime Minister's introduction of taper relief was couched in uncompromising terms. He said:

"We must do more to increase the quantity and quality of long-term investment. The capital gains tax regime that we inherited rewards the short-term speculator as much as the committed long-term investor."—[ Hansard, 17 March 1998; Vol. 308, c. 1101.]

Yet at the very time that the Government ought to be looking at whether it would be appropriate to offer additional inducements to long-term investors, they are moving in the opposite direction.

The Chancellor's January statement also put a great deal of store in the capital gains personal allowance. He mentioned it several times, as if to suggest that its continued existence compensated in some way for the 80 per cent. tax hike. However, a personal allowance does nothing to encourage an investor to hold illiquid assets when gains cannot easily be crystallised and netted annually. It was soon clear that the personal allowances alone were totally inadequate when it came to the expectations of the business community, so another fudge was cooked up.

How are we to greet the compromise? Richard Lambert, the CBI's director general, is quite clear about the merits of a change that is

"superficially quite clever and on the surface might seem like a relief" but that results in even the smallest business owner being worse off than before. However, I prefer to look directly at one of the architects of the scheme. Edward Troup, who is now director of business and indirect tax at the Treasury, wrote witheringly in the Financial Times in January 2002 complaining that the Prime Minister's original introduction of taper relief had pandered to political lobbying and had

"created further distortions and directionless complexity."

He continued:

"Pragmatism has been replaced by opportunism masquerading as principle. The clock should be rolled back. A single rate of, say, 20 per cent applied across the board would stop the worst excesses of avoidance without creating undue distortion."

Mr. Troup might have got his single rate but he also got more than he bargained for in the way of "directionless complexity" from his political masters.

It has become easy in recent weeks to poke fun at a Government who are at war with themselves. It is perhaps more worrying that Treasury officials do not seem to be on the same page as Treasury Ministers. Officials seem to like the idea of brutal simplicity, even when the burdens fall disproportionately. Ministers, on the other hand, do a good line in opportunism masquerading as principle. Members of the Committee will know of my background in the venture capital industry and I want to conclude my remarks by focusing on the support available to serial angel investors.

The Chancellor has proposed a complex package that includes a lifetime capital gains tax allowance for capital gains arising from the sale of business assets. I have no doubt that after months of confusion the scheme is of some comfort to small business men who have a lifetime of work invested in their family businesses. It does absolutely nothing for the committed business angel who shoulders the burden of risk, time and again, to help with the process of genuine wealth creation in this country.

There is little sense of continuity in the Government's thinking on that point. It is only necessary to look back to the Standing Committee debates on the Finance Act 2002, when the qualifying period for taper relief was shortened. My hon. Friend Mr. Hoban hit the nail on the head when he asked the then Economic Secretary a simple question:

"If long-term investment is good and short-term bad, why are the Government shortening the taper?"

The answer he got was very clear, if a little short-tempered. The then Economic Secretary said

"venture capitalists and other early-stage investors frequently invest with a view to realising their capital in less than two years, so we have designed the taper specifically to take into account the natural mode of operation and interests of venture capitalists, and their investments in start-up businesses."—[ Official Report, Standing Committee F, 21 May 2002; c. 170.]

In other words, the relief had been retooled to benefit the very group that seems to have sparked off the latest ill-considered reform of CGT, which is the group that will now see little benefit from a lifetime capital gains tax allowance.

When Mark Neale, managing director of budget, tax and welfare at the Treasury, gave evidence to the Treasury Committee following the pre-Budget Report, he took pains to emphasise how "carefully" the Treasury had considered the Chancellor's original announcement. His reasoning—that taper relief was a successful short-term incentive that had outlived its usefulness because it attracted tax avoidance—was a new departure for the Treasury and broke with years of momentum.