Finance (No. 2) Bill
Debate between David Rutley and Julie Hilling(10 years, 1 month ago)
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Julie Hilling
I assure you, Mr Deputy Speaker, that I will not collapse. I might just get a little excited.
I find speeches such as that just made by the hon. Member for Redcar (Ian Swales) exceedingly frustrating. The Government say that they want to build a fairer society, but fairer for who? Their actions certainly are not fair for the 2.5 million people seeking work and the nearly 1 million young people still being left on the scrapheap. The Chancellor says that this is a Budget for makers, doers and savers, but it does nothing for those who are making do and who, far from saving, find themselves deeper and deeper in debt.
The worst thing is the continual ridiculous comment that the global financial crash was caused by my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown). Powerful though he is, he did not bring down the world economy. Labour’s public investment did not cause the global credit crunch. Building new hospitals and schools and recruiting tens of thousands of extra nurses, doctors, teachers and police officers in Britain did not cause the sub-prime mortgage defaults in the USA that started the collapse of financial institutions throughout the world. It was not Labour’s public spending that triggered the world’s economic crisis but the global interdependency of reckless banking that triggered an economic meltdown in Britain and across the globe.
David Rutley
Was not a record structural deficit a major contributing factor as well? The hon. Lady seems to airbrush that out of the equation.
Julie Hilling
The hon. Gentleman should continue to listen to what I have to say, because before the crash we did not have the structural deficit that he is talking about.
David Rutley (Macclesfield) (Con)
It is an honour to follow the speech of the hon. Member for Glasgow North East (Mr Bain). I anticipate hearing the words of my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) and I, as the Member for Macclesfield, represent north-east Cheshire.
It is good to see you smiling in your place, Mr Deputy Speaker, because the sea of gloom on the Opposition Benches reminds me of one of Eeyore’s greatest quotes:
“‘It is snowing still,’ said Eeyore gloomily…‘And freezing …However,’ he said, brightening up a little, ‘we haven’t had an earthquake lately.’”
That is the spirit on the Opposition Benches: gloom and despondency. This morning I went to the annual conference of the British Chambers of Commerce. Opposition Members are out of touch with the mood of the business community and the progress that is being made in the real economy. I ask Opposition Members to get out of the Chamber from time to time, speak to local businesses and get a sense of what is going on and the opportunities out in the real marketplace.
Julie Hilling
I do go and talk to businesses, but I wonder whether the hon. Gentleman talks to his ordinary constituents: the people seeking work or who are in low-paid work, and those using food banks or those who cannot afford to heat their houses. The Budget is not just about business, but about stopping people living a dreadful life.
David Rutley
That is a good question and I thank the hon. Lady for giving me the opportunity to respond. Of course I speak to members of the public in Macclesfield and outside my constituency, too.
Finance (No. 2) Bill
Debate between David Rutley and Julie Hilling(11 years ago)
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David Rutley
Much as I enjoy going to Salford and the hon. Lady’s constituency, some honesty is required about how growth should be funded in the north-west. I am sure Mr Deputy Speaker has a view on that too, but he cannot express it in the Chamber. Under the previous Government, in the 10-year period to 2010, 100,000 jobs were created in the public sector in the north-west. During the same period, there was a net reduction of 25,000 jobs in the private sector. That is completely unsustainable. What we are trying to do in the north-west and throughout the whole economy is to have a more sustainable approach to job creation, which has led to the creation of more than 1 million jobs in the private sector. That is a far better record than anything from Labour when it was in power.
David Rutley
No, I have given way enough. We have all enjoyed the debate, but I shall now finish my speech.
In Macclesfield, we have one of the highest rates of self-employment in the UK, and among women Macclesfield has the highest rate of self-employment in the north-west. This year, the Budget was above all for small businesses and entrepreneurs like them. The Bill is the first step to realising the series of measures that will be delivered by the Government, such as the widely welcomed—at least on the Government Benches—employment allowance.
Not just small businesses welcome the return to a solidly pro-enterprise, pro-competition, lower tax environment. The Institute of Directors and the CBI both welcomed the clear progress in the Chancellor’s continual, and continuing, efforts to lower corporation tax. Clause 4 of the Bill provides for a corporation tax rate of 21% in financial year 2014, which is the lowest in the G7. Perhaps it is part of Lady Thatcher’s legacy that these days clause 4 is something to be celebrated as useful to the economy and progressive for growth.
The Chancellor has gone one better. Under clause 6, we will see Britain’s main rate of corporation tax reduced to just 20% in financial year 2015, the lowest in the G20. This is a clear, determined agenda to incentivise business activity for jobs and growth. It is precisely that clarity and determination that gives businesses certainty and confidence that enterprise is worth conducting in the UK, and that, as the Chancellor said, Britain is once again open for business.
It is a mark of how vastly over-complicated our tax system has been allowed to become that there are far too many opportunities to avoid and even evade taxation, and that very complexity has made a general anti-abuse rule inevitable. Of course, the Government are well aware that they must take great care that such a rule does not undermine the certainty and confidence in the tax system that we need. It would be sad if the GAAR became an excuse for HMRC to become sloppy when drawing up future tax rules in the knowledge that, if it did not get the desired results, it could always apply the rule. I am sure that the Treasury is determined to avoid such a situation.
I am pleased by the Government’s commitment to simplifying the tax system at the same time that the anti-abuse rule is being planned. Fighting complexity with complexity is not a long-term solution, so I look forward to progress on simplification. It is encouraging, and to the Chancellor’s credit, that in just three years the Government have taken the UK from near the bottom of the KPMG league table of competitive tax regimes to the top. That is progress, and I applaud it. Ministers should also be praised for not only explicitly recognising that there is yet more to be done, but setting a path for getting that done, not least by increasing the personal allowance to £9,440 this tax year, with the clear target of hitting £10,000 next year.
The Bill includes a significant commitment under schedule 14 to research and development credits, even for those companies with no corporation tax liability. The Chancellor’s decision to increase to 10% the rate of credit for above-the-line R and D, as well as the new £700 million annual patent box, will help to tackle under-investment in knowledge-based industries. That is important for the life sciences sector, which is critical to Macclesfield’s local economy and vital for our national competitiveness. Those measures are in addition to the tenfold two-year increase in the annual investment allowance for qualifying investments in plant and machinery from £25,000 to £250,000, which will boost much needed business capital investment.
The global race is not a sprint, but a marathon, and the Government are wise to recognise that it will be easier for businesses to run without hurdles and barriers in their way. To be blunt, if we want businesses to thrive, we need to tax them less and minimise the bureaucratic burden. The result of that approach is real sustainable growth and new employment opportunities. This is not about Thatcherite dogma; it is actually happening and it is delivering positive results, such as by enabling private sector employment growth of more than 1 million jobs since 2010. That is a great achievement for the Government—