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Capital Gains Tax

January 24, 2008

Question written on 24/01/2008

Like many Members, in these sorry circumstances I support the proposal, although it flies in the face of the simplicity that was the whole idea of the original statement in October.
It is important to have a sense of perspective. I think that between 1945 and 2002 most business owners would have been delighted at the prospect of not having to pay tax on 82 per cent. of their earnings, but that is partly a function of being in a global economy. Does the Chancellor not recognise, and will he not confirm, that this climbdown will require yet more anti-avoidance measures?

Answered by Alistair Darling, Chancellor of the Exchequer

I am grateful to the hon. Gentleman. He has endeavoured to give a fair assessment of what I am proposing, and he is the first Conservative Member to say that it might actually merit support. He is right: obviously the tax rates have changed over the years. I do not think many people apart from the hon. Member for Twickenham (Dr. Cable) believe that capital gains should be taxed at 40 per cent. I think that a lower rate is right, and our rate is comparable with international rates.
I believe that this measure will help small businesses. I believe that all Members believe that people who take the trouble, put in the effort and have the initiative to set up and develop such businesses ought to be supported, and that is what I am trying to do.