Capital Gains Tax (Rates)

Edward Timpson Excerpts

Monday 28th June 2010 Commons Chamber

[Yvette Cooper]

My hon. Friend is right that the Government’s proposals do not even include the consequences of the spending review and the proposed additional £17 billion of cuts in public services.

We think that it is better for people to be in work than on the dole, and that is why we funded the future jobs fund and additional support and jobs. They were often in the community and run by the voluntary sector, and they helped young people to obtain the skills that they needed and to stay off the dole. Yet, shockingly, the Government have cut 90,000 jobs through the future jobs fund, putting all those people—additionally—back on to the dole and pushing up unemployment bills. As a result, even on the OBR’s calculations, those measures will cost the Government £2 billion more over the next four years. They will have to pay additional benefits for the unemployed, and the financial, economic and social price of higher long-term unemployment will cost us more for years.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

Will the right hon. Lady give way?

[Yvette Cooper]

I want to make some progress before I do.

The Secretary of State also said that he wants to make work pay. Yesterday he told Sky that there are marginal tax rates of 90p in the pound for some young people, that that was regressive and that he wanted, first, to change the system so that they are able to keep more of their own money. But, page 69 of the Red Book shows that as a result of the Budget an extra 20,000 people will lose more than 90p in the pound.

We agree that housing benefit needs reform, and we brought forward some measures in the March Budget and introduced a consultation paper last December to set out our proposals. We agree also that we have to stop some of the most excessive rents being paid, and that we should exclude some of the highest rents in every area. However, we should also consider how we provide more security and payments for people moving into work, so that work incentives are improved. There is a strong case for linking housing benefit to tax credits in the longer term, but the Government’s proposals do not set out any reforms; they set out only cuts, and destructive ones at that. Their plans cut almost £1.7 billion a year from housing benefit, and there is no analysis of how many people that measure will push into poverty or homelessness.

--- Later in debate ---

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

In the limited time available to me, I want to concentrate on some specific areas of the Budget that affect either my constituency or subjects about which I feel passionately, but first let me say that there was one subject the hon. Member for Barnsley Central (Mr Illsley) did not speak about: bingo. It is a passion that we share, and it is important to mention it as I do not think it has been referred to so far in the Budget debate. Through campaigning, we recently managed to secure a reduction in the tax on bingo from 22% to 20%, and I am sure he would want to join me in campaigning to ensure that that reduction continues until we have got it back to the 15% level and that we get a commitment from the Government that they will look to reduce that tax as soon as the financial circumstances of the country allow.

The right hon. and learned Lady the Leader of the Opposition said in her response to the Chancellor’s statement that the Budget would “hit” constituents in Cheshire the least. I am unsure whether she said that out of concern for the poorest and most vulnerable people in my constituency or out of political mischief aimed in the direction of the Chancellor, my right hon. Friend the Member for Tatton (Mr Osborne)—although I think I know which is the more likely—but I am nevertheless glad that she raised the matter. Crewe and Nantwich is home to some of the most poverty-stricken areas in Cheshire, and it is the people in those areas who deserve to be—to quote the right hon. and learned Lady again—“hit” the least.

In 2008, the year in which I was first elected to the House, Labour hit the lowest paid with the 10p tax fiasco. While this is a difficult Budget, I am proud of the fact that the coalition is doing the opposite by lifting 880,000 of the lowest paid out of tax altogether. I am also proud that we are introducing the earnings link for pensions, something Labour did not do for 13 years, instead, unforgettably, increasing the pension by 75p.

It is not just these headline measures that affect my constituency, however. The Government have announced that they will reduce regulatory costs by introducing a one in, one out system for new regulations. That was touched on by my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), who made an excellent maiden speech. She made the point that regulation is right at the heart of the issues that small businesses in particular face. At an election hustings event in Crewe and Nantwich organised by the Federation of Small Businesses, local business man after local business man told me about their No. 1 concern: stifling regulation. At present, a small business spends on average seven hours a week filling in forms. What a waste! Three in four firms say the Budget will make a positive impact on their business, and I have no doubt that to those job and wealth creators the reduction in regulations is one of the most important measures that back business in the Budget. It has inspired a welcome response.

Another measure in the Red Book that will benefit business in Crewe and Nantwich is the coalition’s commitment to investigate ways to help with fuel costs in remote rural areas. The coalition is considering the case for introducing a fuel duty discount in those important parts of the country, including a possible pilot scheme in Scotland, but I ask my right hon. and hon. Friends on the Treasury Bench to consider extending the scope of the pilot schemes to include thriving rural economies such as that in Crewe and Nantwich, which is at the very heart of our dairy industry.

I also want to speak about one of my particular passions: adoption and fostering, and looked-after children. As chairman of the all-party groups on both those subjects, and as someone who shared his childhood—and most of his adulthood—with foster children, I can say that foster carers will be very happy that their capital allowance rules will be amended in this Budget to ensure that they operate consistently and as intended for all carers. Foster carers are to be applauded for the sterling work they do in providing for some of the most vulnerable in our society, and none of them should be penalised by the taxation system purely because their business circumstances change.

We know we have to make choices in this Budget about where we make cuts. There are issues of essential spending and issues of discretionary spending, but money spent on looked-after children and the caring and support of vulnerable children by foster carers should never be seen as a luxury, so my plea on behalf of a part of our population that cannot speak for itself in these chastened and difficult times is do not forget about us. If the baby P and Edlington cases taught us anything, it is that when it comes to child protection we cannot afford to cut corners or pass the buck. With 40% of people in prison having been through the care system, we have to recognise that there is still much to do.

I believe that this is a decisive Budget. It deals with the record deficit the Government inherited from Labour and it contains important measures that will benefit some of the poorest and most vulnerable in my constituency, as well as the business and rural communities. It is hard to welcome some of the tougher measures contained in it, but, sadly, they are necessary, albeit painful, decisions. I applaud the overall structure of the Budget, therefore. We on the Government Benches did not build up the record deficit, but we will do all we can to knock it back down and get Britain back in the black.