Finance Bill

Jonathan Edwards Excerpts

Tuesday 6th July 2010 Commons Chamber

[Danny Alexander]

I will press on, if I may.

As my right hon. Friend the Chancellor said, this is a progressive Budget.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Will the Minister give way?

[Danny Alexander]

I am going to make some progress, but I will give way to the hon. Gentleman in a moment.

The Budget includes progressive measures such as increasing the rate of capital gains tax by 10 percentage points for higher rate taxpayers while keeping it the same for basic rate taxpayers. Clause 2 increases the rate of capital gains tax to 28% for higher rate income tax payers, but basic rate taxpayers continue to pay an 18% rate. The entrepreneurs’ relief lifetime limit will be extended from the first £2 million to the first £5 million. That implements the commitment in the coalition agreement to provide generous exemptions for entrepreneurial businesses.

--- Later in debate ---

[Danny Alexander]

I have given way a great deal, and I now give way to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards).

[Jonathan Edwards]

On geographical fairness, does the right hon. Gentleman agree with the recommendations of the final Holtham report, published today, which calls for an immediate Barnett floor to protect Wales from further convergence, the implementation of transition mechanisms towards a needs-based formula, and a place at the table for the Welsh Government in discussions on fiscal autonomy for Scotland?

[Danny Alexander]

I am grateful for that intervention. I have not yet had a chance to read the second Holtham report, which is published today. However, in the course of a meeting with the Welsh Finance Minister, I undertook to meet Mr Holtham once he had published his second report, and I look forward to doing so and having a chance to discuss it directly with him. At this stage, I will not make any commitments of the sort the hon. Gentleman wants, except to note that on the path of public finances as they are at the moment, further convergence is not forecast over the next few years.

The changes to capital gains tax help to pay for further progressive measures such as our increase in the income tax personal allowance, which takes almost 1 million of the lowest-earning income tax payers out of income tax altogether. It also increases the incentive for people on low incomes to get a job. That is fairness.

--- Later in debate ---

[Jonathan Edwards]

Does the hon. Lady agree that the regionalisation of corporation tax would be a more helpful way to assist the most disadvantaged parts of the United Kingdom?

[Lorely Burt]

The hon. Gentleman asked me about the regionalisation of corporation tax, but these are UK taxes so it is inappropriate to regionalise. He makes an interesting point that I have not considered before, but I am sure that my hon. Friends will take an interest in the idea if it has merit.