Budget Resolutions and Economic Situation

Damian Collins Excerpts

Wednesday 3rd March 2021 Commons Chamber

[Damian Collins (Folkestone and Hythe) (Con) [V]]

I welcome this Budget, which has sought to strike the right balance between helping businesses and individuals that have been badly affected by the coronavirus, providing support as we transition this year through the lifting of the covid social contact restrictions, and setting out a plan for how the burden will be shared as the Treasury seeks to reduce the Government’s annual borrowing requirement. I know that many retail, leisure and hospitality businesses in my Folkestone and Hythe constituency will welcome the extension of their tax reliefs and the announcement of the restart grant scheme. It is also right for the Chancellor to extend the uplift in universal credit and working tax credit that was introduced last year.

In looking to reform business taxes, it is important that any increases over the next few years are borne fairly and that those who can most afford them pay their fair share. However, we know today that that is not always the case, and the lever of increasing corporation tax, which may have worked in the past, may not work quite so well when we have major companies, particularly in the technology sector, which avoid paying a level of taxes commensurate with the value of the business that they do.

In this year of coronavirus, some of the biggest winners have been the major online retailers—companies that pay relatively little in corporation tax and in business rates compared with the high street businesses that increasingly they compete against. I welcome the super deduction for business investment, but we may see that some of these companies were already planning to make big investments—companies such as Amazon investing in new warehouses and facilities—and will do so now and recoup even more off their tax bills. We need to think about how we can effectively tax businesses that operate online and through multiple jurisdictions, so that they pay a level of tax that is relatively fair for the business that they do and is on more of a level playing field with the businesses in our communities with which they increasingly compete.

We also need to reform the way business rates work, taking into consideration that the size of premises in a town centre is not always a good indication of the value of the business that is done. We need to look in the future to reform workers’ rights, particularly following the ruling by the Supreme Court about Uber, so that businesses that are in effect employing people are also paying the sort of employer contributions, taxes and employer national insurance that other businesses are asked to make.

As this year the Competition and Markets Authority establishes its digital markets unit, we need to make sure that big companies such as Google, Facebook and Amazon are not abusing their market power, and therefore creating inbuilt costs for consumers through charging advertisers too much. We also need to ensure that workers get their fair share. Fair competition for British businesses looking to compete in the tech sector is important, and we need to reform our competition law to make sure that is possible. That will be an important part of making sure that we can build back better after the year of covid.