Finance Bill

Stephen Williams Excerpts

Tuesday 6th July 2010 Commons Chamber

[Clive Efford (Eltham) (Lab)]

I congratulate my hon. Friend the Member for Scunthorpe (Nic Dakin), and the hon. Members for North East Cambridgeshire (Stephen Barclay) and for Ipswich (Ben Gummer), on their maiden speeches. The description of the blood-red sunsets by the hon. Member for North East Cambridgeshire showed his passion for his constituency, and my hon. Friend spoke well of his predecessors and his love of his adopted town. The hon. Member for Ipswich, if I may say, spoke very little about his constituency for a maiden speech. It was none the less a maiden speech, and I congratulate him on it.

Nothing sums up the Budget more than the Financial Times headline the morning after: “Well paid breathe collective sigh of relief”. The article discusses the impact of capital gains tax, stating:

“Higher earners expecting to bear the brunt of the chancellor’s tax rises were breathing a collective sigh of relief yesterday, having been spared major increases to capital gains and income tax in the emergency Budget…Capital gains tax rates of 40 or 50 per cent and further restrictions to pension tax reliefs had been forecast by tax advisers in the weeks after the general election. When a smaller increase in CGT - just for higher-rate taxpayers - and a consultation on allowing pension contributions of £45,000 a year were announced, many were pleasantly surprised.”

The director of RBC Wealth Management is quoted in the article. She said:

“Many higher earners will be breathing a sigh of relief.”

The Fair Investment Company, an independent financial advice company, made similar exaltations:

“CGT has not been raised up to 50 per cent as speculated and the exemption allowance has not gone down to £2,500 like the Lib Dems proposed, so many higher-rate taxpayers will be breathing a sigh of relief”.

We were told that the Lib Dems and the Tories want to raise £1 in tax for every £4 they cut in public expenditure, but where is the mandate for making those cuts? At the general election, the majority of the electorate voted for parties that opposed drastic cuts, including an increase in VAT and the proposed austerity Budget to cut public services.

[Stephen Williams (Bristol West) (LD)]

The hon. Gentleman appears to be lamenting the fact that capital gains tax was not increased by more than proposed in the Budget. At which point during the 13 years of Labour Government, when capital gains tax was decreased from 40% to 18%, did he protest that?

[Clive Efford]

The hon. Gentleman misses the point. The point is what the Liberal Democrats said about capital gains tax before the election and what has happened afterwards. I cannot find any record of anybody saying, “Thank God we have the Liberal Democrats to water down this horrible Tory Budget.” No one is saying that—[Interruption.] As much as the Liberal Democrats try to dance on a pinhead over the VAT increases and how they have looked for an investigation into VAT so that they can all cuddle up at night and sleep well knowing that they have not made life awful for poor people—they claim that they have forced the Government into a review—what will they really do about it?

--- Later in debate ---

[Clive Efford]

It will indeed; my hon. Friend is absolutely right.

The Guardian website on Sunday 4 July stated:

“CBI disappointed by extra £4 billion capital spending cut. Spending on building and infrastructure projects, many of them to support private sector businesses, will fall faster than expected after the chancellor announced £6.2 billion emergency cuts three weeks ago, with £2 billion of the total from capital expenditure projects. The CBI said: ‘Capital investment is crucial to driving the economy forward and the government needs to make sure we get back to the long-run average of 2.25% of national income as soon as possible’.”

Are you listening on the Liberal Democrat Benches? What they are voting for is just above 1%.

[Stephen Williams]

I am enjoying the hon. Gentleman’s oral press cutting service. I was listening, enraptured, and waiting for him to contradict the hon. Member for North Durham (Mr Jones) and tell him that VAT is not applied to new builds.

[Clive Efford]

My hon. Friend—