Capital Gains Tax (Rates)

Debate between Diana Johnson and Geoffrey Clifton-Brown

Wednesday 23rd June 2010 Commons Chamber

[Diana R. Johnson]

The hon. Gentleman does a disservice to the fact that long before the general election, there was cross-party working by hon. Members on both sides of the House to make the economic case for reducing the Humber bridge tolls. He will know that the then Transport Minister, my right hon. Friend the Member for Tooting (Sadiq Khan), had decided not to allow the increase in the tolls and a review was being conducted of whether the toll could be reduced to £1. All I was doing was questioning what was going to happen, and I would be grateful if the coalition partners threw some light on the subject. I am sure that all hon. Members are keen to get a satisfactory resolution to that ongoing problem.

I have a few comments to make about what Labour would have done, had we secured a majority at the election. It is clear—the shadow Chancellor made it clear—that of course we need to get the deficit down. Before the election we had legislated to say that we would halve the deficit within four years, and in the Departments work was being done to identify where reductions could be made. I was in the Department for Children, Schools and Families, so I know that areas had been clearly identified, and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) told me that clearly identified savings had been put together in the Home Office. It is wrong to say that the Labour Government had not started work; however, we made it clear that we had to wait until the growth in the economy was secure.

A key issue that the coalition Government have to grapple with is the fact that just making cuts across the board is not the sensible approach. We need to think about what policies we can introduce to spend and invest now so that we can ensure that we save in future. One of the policies very dear to my heart is healthy free school meals, which piloted in Hull but was slashed by the Lib Dem council without the evidence being evaluated. I believe that there is an economic case to be made. Investing in children early on, making sure that they eat healthily and well and do as well as they can in their education, will reap benefits for us as a society later on. I was disappointed to see that the extension of the free school meals pilot has been abandoned by the coalition Government, as well as the extension of eligibility to those in receipt of working families tax credit, which would have made more families eligible to get free school meals for their children. That is very short sighted.

By cutting too deep and too early, we will risk jobs—jobs in Hull, jobs in Yorkshire and the Humber, and jobs nationally. We will have higher welfare costs and less tax revenue. Growth will be suppressed and I think that the deficit will be much worse.

[Geoffrey Clifton-Brown]

The hon. Lady has spent her entire speech carping about my right hon. Friend the Chancellor’s Budget. Can she not at least welcome the large regional fund that is to be set up, through which funding will probably come to her area and which may well benefit her constituents by providing jobs?

[Diana R. Johnson]

I do not know—there is no detail. We have had vague promises from Ministers about what the regions will get, but no detail. I cannot explain to business men and entrepreneurs in my constituency where the money is coming from to support and incubate their businesses. As far as I am concerned, this is all hot air. [Interruption.] Wait and see? Businesses in my constituency cannot do that. They need to know whether there is to be investment and support. If the coalition Government are serious about supporting the economy in the regions, they should have had their proposals and policies ready for yesterday’s debate and been able to explain what money is available to people in the north.

The welfare reforms and the tax changes announced yesterday will cause great problems in my constituency. Although basic rate taxpayers are promised an extra £170 a year in income tax allowance, that will be far outweighed by the VAT increase to 20% from 4 January next year. We have heard at length about the Lib Dem election campaign poster saying that there would be a Tory VAT bombshell, but the Deputy Prime Minister—bless him!—has done another U-turn that takes his party to a new level of opportunism. That regressive tax on growth will cost the average household £425 a year. That is without counting the other regressive changes in things such as housing benefit, child benefit and child trust funds and the disgraceful scrapping of the health in pregnancy grant.

As my right hon. Friend the Member for Kingston upon Hull West and Hessle told the Prime Minister and the Deputy Prime Minister—the self-righteous brothers—they are leading this Government and repeating the PR mantra, “We’re all in it together,” but some parts of our country will be altogether more in it than others. A party that has never been known for sharing wealth and opportunity fairly is very keen to share austerity with everyone.

This past month shows that we have replaced a one-nation Government with a coalition of the two oldest parties, representing the misconceived interests of the privileged classes in this country. My constituents in Hull North, Bransholme, Orchard Park and similar areas, who need public support and public investment to give them the opportunities that, through no fault of their own, they lack, will suffer because of this Budget and this coalition Government.