Capital Gains Tax (Rates)

We have had some excellent debates in the Chamber since the Chancellor presented his Budget to the House. They have been good debates not least because we have heard the speeches of some extraordinary new Members, and I hope I will be forgiven for dwelling for now on only the maiden speeches we have heard today. The hon. Member for East Surrey (Mr Gyimah) rightly perceived that Budgets are not simply collections of statistics. They are important because they are statements about our ambitions for our country and our communities. I was glad to see the scale of his ambitions for East Surrey and I wish him the very best of luck in the difficult business of delivering them, but he showed us that he needs no shoulders to stand on. The hon. Member for Maidstone and The Weald (Mrs Grant) put the emphasis on family and enterprise. She will find a ready audience for both subjects in the House. She spoke with real feeling about the need to draw politicians and civil servants into public life from a wider range of backgrounds. She is right about that. My hon. Friend the Member for Airdrie and Shotts (Pamela Nash) spoke movingly about her memories of John Smith and of her debt to John Reid. I served as one of his Ministers and she got his character absolutely right. She was passionate about her constituents and will clearly be an effective fighter in this place on their behalf. The hon. Member for Thurrock (Jackie Doyle-Price) spoke about her roots and how they have shaped her political outlook. She left us very much wanting to hear more. The hon. Member for Pudsey (Stuart Andrew) told us about some of Pudsey's famous sons—if that is the word to describe both Sooty and Sweep; I have never been quite sure—and I now know the home of Britain's best fish and chips. The hon. Member for Truro and Falmouth (Sarah Newton) was passionate and informed about green energy. The House is in need of those qualities on that subject, and we look forward to hearing more from her. Listening to my hon. Friend the Member for Glasgow Central (Anas Sarwar) brought me enormous pleasure. He captured with brilliance his father's passion and contribution to this place. He showed us that he is a magnificent successor to his father. When all is said, however, at the heart of the debate is a judgment. The reality is that the Budget has presented us with the judgment of a gambler. That is not just our conclusion; we have heard it across the spectrum of informed opinion. KPMG said:""This is a kill or cure budget"," which""risks choking off the recovery."" The Chartered Institute for Personnel Development said that it""will curb the demand for the goods and services that…drives business investment and exports."" BNP Paribas—hardly a bedrock of socialism—said:""We expect GDP will be much weaker than the Budget projections"." Lombard Street Research said that""there remain risks that aggressive fiscal tightening causes the UK recovery to stumble."" IHS Global Insight said:""There is undeniably a very serious risk that this accelerated and intensified fiscal tightening could derail a still fragile UK economic recovery."" This afternoon, we have been presented with a contrast. In Toronto, international leaders gathered to agree that the need now was for what they called "growth-friendly" fiscal consolidation, yet at home we are presented with a Budget that suffered the instant indignity of its independent reviewers telling us that it will not speed up recovery, but will slow it down. It will not put more people in work, it will put more people on the dole. It will not move the Chancellor's party—it is so kind of him to join us—from the 1980s, because at the heart of the Budget is an old calculation: unemployment is a price worth paying. That is a philosophy that the Opposition cannot and will not accept. Only in the fine print of the Red Book does the scale of the Chancellor's bet become clear. The Chancellor promised that he would be up front with us, but in the small print of the Office for Budget Responsibility report we see that he is gambling on growth of £192 billion in business investment and exports to pull us through. Last week, he told us he was all for caution, but now we have learned that he is relying on business investment that is higher, not lower, than Labour's projections, helped no doubt by the cancellation of support for firms such as Sheffield Forgemasters and cuts to investment allowances for manufacturing firms. What do manufacturers think of that? The Engineering Employers Federation said that manufacturers""will now be left wondering where the necessary growth and investment will come from, given the cuts to investment allowances and capital budgets."" Last week, the Chancellor liked to tell us he was all for caution, but now it turns out that he is relying on trade figures not seen in this country since 1974 and only beaten once—in 1950. Yet the prospects for trade in Europe, where half our exports go, are not better than when the March Budget was written; they are worse. Where, exactly, will all those exports go? I wanted to know whether we had ever had a recovery like the one the Chancellor is gambling on in the next three years, so I asked the Library to do some research, and it said that only once has business investment and trade recovered in the way that he prays for, since the Library started collecting figures in 1966. Now, he is relying on the same performance for the next three years in a row. It is like betting not just on England winning the World cup, but on winning the next three World cups in a row. His strategy is nothing short of a massive bet on a recovery that has been hard-fought by businesses and families in this country. But of course, it has been made possible by the Liberal Democrats' support, not least the imprimatur of the Secretary of State for Business, Innovation and Skills, who is not in his place tonight. Thus the man who made his reputation attacking casino banks has ushered in casino economics to the Treasury. It is now right to give the Business Secretary a little credit: he at least had the decency to give the House an extended mea culpa for his change of heart. In January, as some hon. Members will remember, he told the House that he agreed with my right hon. Friend the shadow Chancellor about the way forward. Now, he agrees with the Chancellor. At least he spared us the nonsense that, somehow, Britain risks becoming Greece—a country still in recession, with debt twice the level of ours and no ability to devalue its currency. All this is hinged, it seems, on the words of the Governor—words, I notice, that were entirely absent from the Monetary Policy Committee's minutes for May. In essence, the Business Secretary made markets his defence—it was not his fault; the markets forced him—but somehow, he forgot to mention that those were the same markets in which interest rates were falling during the election. The MPC's minutes for May are, in fact, very helpful. They note that 10-year spot rates were declining, not rising, by about 30 basis points in the month before the election. The tragedy, of course, in the Budget is that there was an alternative. No doubt we will hear from the Chief Secretary a pretence that, somehow, he inherited no plan. Of course, nothing could be further from the truth, because until May he agreed with our plan. Labour's plan to halve the deficit by 2013, with debt as a share of our national economy falling by 2016, is bang in line with the G20 communiqué announced to the House by the Prime Minister today. I notice that Sir Alan Budd agreed that we were on track to deliver that plan, not least because the public finances were £30 billion better than expected.