Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Capital Gains Tax (Rates)

Part of the debate – in the House of Commons at 5:00 pm on 23rd June 2010.

Alert me about debates like this

Photo of David Evennett David Evennett Conservative, Bexleyheath and Crayford 5:00 pm, 23rd June 2010

May I welcome you to the Chair, Madam Deputy Speaker? I am grateful for the opportunity to contribute to this vital debate, which has been interesting and lively. I congratulate my hon. Friend Andrew Jones on an excellent, effective maiden speech, and I look forward to hearing more from him in the future. I also congratulate my hon. Friends the Members for The Cotswolds (Geoffrey Clifton-Brown) and for Bournemouth East (Mr Ellwood) on constructive, thoughtful and progressive speeches, which addressed the problems facing our country.

I am disappointed by Angela Smith and some of her colleagues who seem to think that there is a right-wing ideological agenda. The Budget has a practical, realistic approach, from a coalition Government who are determined to get our country out of the economic mess in which the Labour Government left us. We will not forget that, and we will take no lessons from them about the situation in which we find ourselves. Many of us would prefer not to have to take some of the measures in the Budget, but the 13 wasted years under Labour have resulted in a real mess.

I am disappointed that Huw Irranca-Davies is no longer in his place, because his was a constructive and passionate speech. I say to him and to Labour Members, including those on the Front Bench, that most of us came into politics to improve the condition of everybody in society, not just one section of it. We are determined to look after the disadvantaged and to help the less well-off, the disabled, pensioners and those in real need, but to do that we must have a strong economy and money to invest in such services. It is regrettable that the Labour party destroyed our economy and the opportunities for many people. I agree with the comment that most Labour Members who have spoken seem to be in denial about the problems that they have created and the situation in which we find ourselves. They keep on with the mantra, "It is a world situation" and so on. Of course, there is a world recession, but it was made worse by the incompetence of the Labour Government and their failure to deal with the issues early enough and to take the necessary measures to ensure that we could weather the storm. The consequences are a disaster for the whole country. History lessons will not do when we have had 13 wasted years.

My right hon. Friend the Business Secretary made a progressive, rational and measured speech and explained to us all his thinking and how he has come to his decisions. We value that, because he has looked at the facts and figures and made a reasonable judgment accordingly. I also congratulate my right hon. Friend the Chancellor on a positive and constructive Budget in very difficult times. It was positive in its aims and objectives, based on fairness and reasonableness, and in its twin approach of dealing with the debt problems and planning for the future.

Having been a Member of the previous Parliament, I also welcome the Chancellor's candour, openness and clarity about the situation in which the country finds itself. How different this was from Budget statements under the last Government. Those were all spin and propaganda, and Members had to leave the Chamber and read all the minutiae in the small print to find out what they really meant. Yesterday the Chancellor of the Exchequer was open and frank, telling the people about the problems and what needed to be done about them. He did not conceal the facts in the small print or hide them away in other paperwork.

After 13 years of Labour government, our economy has been shattered by mismanagement. We have a huge public debt and great unfairness in the tax system, and businesses, particularly small businesses, feel battered and bruised. We really do need a new approach and a new direction. Yes, the Budget is tough and austere, but it is also necessary and fair, and it is unfortunately unavoidable because of the position in which we find ourselves. We need a decisive breach with the past so that we can build facilities and services for the less advantaged and the most disadvantaged, such as those who are sick and will need more help in the future.

I want to concentrate on enterprise, pensions and training. As a Conservative, I believe passionately in lower taxation, and I am pleased that my right hon. Friend the Chancellor of the Exchequer also aspires to achieve that goal-when the time is right. When the time is not right, we must increase taxation, however hard that may be, in order to balance the books. I know that my constituents will appreciate my right hon. Friend's approach, because after 13 years of Labour they feel that they have been over-taxed and over-regulated, and that there has been too much bureaucracy and red tape and not enough support for their business activities.

My constituents have experienced the problems of increasing unemployment and economic inactivity, and most of them feel that bureaucracy and taxation have been excessive. Regrettably, those problems must be addressed with vim and vigour. Local business men tell me that central Government support was inadequate during the recession, and that publicly owned banks were unhelpful when they applied for credit or assistance. They were cast adrift by a Government who said wonderful things in the House, but did not follow them up with real measures to help small businesses make the wealth on which our country depends. It was clear that action by the new Government was urgently required to deal with that on all fronts.

The Government have already cut £6 billion of spending because we cannot afford it. If we are to create jobs and growth, it is vital that we help the small and medium-sized businesses that are at the heart of our economy. We need to show that Britain is open for business, and attract firms into the United Kingdom. We need reforms of tax and regulation to make it less costly and bureaucratic to run or start a business. We need to shift the balance in our economy back towards private enterprise, rather than the public sector dependency that we saw during those 13 years of Labour government.

I agree with the hon. Member for Penistone and Stocksbridge that the public sector has a vital role to play, and that it can create wealth and opportunities. Most wealth, however, is created by the small and medium-sized businesses which pay the tax and allow us to spend the money that we need to spend on our vital public services. I am amazed at the increase in public sector pay and pensions over the past decade. We would surely expect the Prime Minister to have a higher salary than anyone else in the public sector, and when we see that people at the BBC and in some local authorities are being paid considerably more by the taxpayer for doing a less demanding job, we have to ask what has gone wrong.

We also need to deal with the problem of waste. The hon. Lady mentioned regional development agencies, an issue that I raised with the Prime Minister at Question Time last week. Although some RDAs have done a good job, others have wasted money in their bureaucratic way. We have heard about extravagances and expenses that have been in no way connected with the job that those people should have been doing, involving entertainment, offices abroad, novelty items or taxis, which were mentioned by my hon. Friend the Member for The Cotswolds. That profligacy is another Labour legacy that I am pleased to see the new coalition Government will take on.

The managing director of a lighting business in my constituency advised me that he thought the support for small businesses during the recession was

"neither adequate nor well advertised."

He also said that

"there was nothing for a small business in our position or if there was, we didn't find out about it."

His business also had problems with the publicly subsidised banks. Higher banking costs were imposed on it, leading to its having to reduce staff to meet the cost of the charges. That is not the way to get a successful business developing and going forward. In addition to the problems in getting Government support and dealing with an over-complicated tax system, that managing director experienced a great deal more red tape and regulation, which in turn increased costs. That was a legacy of the last Labour Government: more regulation, more red tape and more costs.

I also received representations from a car manufacturing firm in my constituency. Its managing director thought the previous Government did a good job with its advertising. However, when it came to applying for assistance, his company found that support was not available. That is a terrible legacy. He said the investment company appointed to manage the capital for enterprise fund for the Government was interested only in venture capital parameters such as high rates of return. The company also alleged that it did not receive support from its bank. In fact, it suffered increased charges from very early in 2009.

Both those businesses will benefit from the measures announced in the Budget. The reduction in corporation tax will mean they have more money of their own to invest in their business, and either to take on new staff or extend the working of current staff. The Budget will bring benefit to small businesses in particular. They will welcome the lowest ever rate of corporation tax, which will fall from 28% to 24% during this Parliament. The tax rate reduction for small companies from 21% to 20% will also be welcomed, and the extension of the enterprise guarantee scheme will provide a real boost for small businesses struggling to get credit.

The Budget therefore contains a lot that is positive, contrary to what was suggested from the Opposition Benches, where all was doom and gloom. There is enthusiasm for enterprise to get things moving, which is very important for the future of the country, because we must get the debt down and the public finances under control before we can have economic growth. We must never forget that high levels of debt put an unfair burden on future generations. Our role is to look after the future and make sure that our children and grandchildren are not in hock to debt because we have failed to manage the national finances. This emergency Budget will go a long way to rectifying the situation for the future.

Action to stop Labour's job tax by increasing the threshold for employers' national insurance contributions by £21 a week will also be positive. As a result, the number of employees for whom employers pay no national insurance will rise by 650,000. That is another real, positive move to endeavour to ensure that we get ourselves out of the appalling mess we find ourselves in.

The second issue I want to raise is pensions and pensioners. I am delighted that the earnings link is to be restored after 30 years. We have to admit that sometimes the Conservatives made mistakes in government, and it was a Conservative Government who made the mistake of breaking the link. [Interruption.] It is no good Chris Williamson laughing and smiling, because the Labour Government had 13 years to do something about that, but they did not do a thing. They sat on their hands and made nice noises, but action speaks louder than words. This coalition Government have already taken more action on pensioners than the previous Labour Government did in 13 years.

Embed this video

Copy and paste this code on your website