Capital Gains Tax (Rates)

Louise Ellman Excerpts

Wednesday 23rd June 2010 Commons Chamber

[Vince Cable]

The hon. Gentleman is right, and it is the problem of credit supply to the small and medium-sized business sector that has the greatest potential to disrupt the recovery. That is why the Chancellor included in yesterday’s Budget the finance guarantee, and why we now have to work on why banks that were rescued by the taxpayers do not lend to the good companies that the hon. Gentleman describes, which are solvent, have good order books and will contribute to recovery. That is a major task that the Government now have to undertake.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

The right hon. Gentleman talks about the importance of investment and about being fair to regions. The Northwest Regional Development Agency has played a critical role in setting up investment funds for businesses in the north-west and was key in setting up the centre of scientific excellence at Daresbury, which has been responsible for retaining skills in the north-west and for developing science-based businesses. Why does he want to abolish it?

[Vince Cable]

I have met the Northwest Regional Development Agency and I have suggested to it that under the new structures that will be created—the local enterprise partnerships, and local businesses working with their local councils—it will have an opportunity to bid for status in order to carry forward useful projects that support development on the ground. There will be a change—those RDAs are going to be restructured—but there is a role for that kind of innovation locally.

The shadow Chancellor talked at some length about the need for growth. He is right that we need growth, but it has to be sustainable. We had a decade of what seemed at the time, at least to some Labour Members, to be strong economic growth. I am sure that hon. Members will remember, as I do, all those Budgets in which the then Chancellor told us that we had achieved the highest rate of growth since the Hanoverians—I think it was even the Roman empire on one occasion—and talked about a boom in employment. But the house was built on sand and it was all a mirage. It was not sustainable. It was based on levels of personal debt and Government borrowing that could not be sustained; it was also based on a housing market that could not be sustained and on a fragile banking system. We have to restore growth, but it has to be sustainable. That is what the Budget was about.