Capital Gains Tax (Rates)

I will give way in a minute; I want to make a bit of progress first. Universal child benefit will be frozen, but benefits will be recycled so that they are targeted at the most vulnerable through child tax credits. Thereby, the poorest will be protected. That is exactly what we will do in this Budget. We will freeze public sector pay, but we will also increase the pay of those on the lowest incomes. I am sure the right hon. Member for Normanton, Pontefract and Castleford will welcome the fact that half the employees—the lowest paid—at her former Department will get at least £250 this year and next. We will protect health spending, which was a priority, and honour our international aid obligations. We will reduce the deficit by raising taxes more and cutting spending less, but we will also reduce corporation tax from 28% to 24% to make the UK more competitive internationally and get people back to work. We will reverse the cynical pre-election clawback by the previous Government from this year's uprating forecast, and we will do the decent thing and fill the gap they left. We were left with a £300 million shortfall, because the previous Government had uprated benefits when the retail prices index fell below zero but had made no provision to find that money in 2011, so benefits would have been uprated less than the uprating we shall put through next year. Let us not forget that we chose to take hundreds of thousands of low-income individuals out of tax, improving work incentives. More than 880,000 people on the lowest incomes will be taken out of tax altogether and 23 million taxpayers will benefit. That is a Liberal choice—I say that to the hon. Friends sitting on my right—and one I wholeheartedly support.