Capital Gains Tax (Rates)

Debate between Gordon Birtwistle and Geoffrey Clifton-Brown

Wednesday 23rd June 2010 Commons Chamber

[Geoffrey Clifton-Brown]

I remind the hon. Lady that the Labour party won the election in 1997. The Labour Government had between 1997 and 2008 to do something about that, but meanwhile more than 1 million pensioners had to go through means-testing and fill out huge forms to get pension credit. A considerable number did not want to claim the credit, because they were too proud to do so, and they therefore lived in poverty. In the first few weeks of this new Government, pensioners have got a better deal than at any point under the 13 years of the previous Labour Government.

[Gordon Birtwistle (Burnley) (LD)]

Does the hon. Gentleman agree that the Labour Government’s 75p increase for pensioners a number of years ago, which was reduced to 50p after tax, was an insult not only to pensioners, but to the people of this country, which is supposed to be one of the modern countries of the world?

[Geoffrey Clifton-Brown]

I entirely agree with my hon. Friend. Many pensioners have told me exactly that—that it was an insult—so I hope that we can move away from treating our elderly people in such a way. As I have said before in the House—I remember raising this point with the then right hon. Member for Sedgefield during Prime Minister’s questions—the way in which a society treats its elderly people is a mark of that society’s civilisation. I hope that we will treat our elderly people with respect.

In an excellent, sober speech, my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) put his finger on an interesting yet under-mentioned aspect of our economic problems. It is demonstrated by the table on page 7 of the Red Book, which shows that private debt has doubled in the past 13 years. It is, of course, up to members of households to make their personal decisions, but it is also up to the Government of the day to regulate the totality of private debt. The level of private debt has become unsustainable, something on which I often chased the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in Budget debates. As the Red Book shows, the savings ratio was lower by the end of the Labour Government than at any time since the 1950s. It is incumbent on any Government of the day not only to encourage savings, but to ensure that the savings culture exists in a stable regime in which inflation is not completely out of control. If we did not take the action outlined in the Budget, interest rates would rise, thus putting inflationary pressure on the economy.