(10 years, 5 months ago)
Commons ChamberCertainly, very important steps are being taken, such as raising personal allowances, which will help all our constituents who are facing challenging times. However, there are also measures in the Bill that will help businesses to create more work and more wealth, and help us to achieve greater growth and prosperity.
Returning to clauses 39 to 43, the Chancellor has championed the consumer’s right to take decisions in accordance with their own life circumstances, over and above the procrustean desires of the state. Much has been said about these reforms, and no doubt plenty more will be said in the days and years ahead, but I want to focus today on how other clauses in the Bill are equally supportive of consumers by bolstering competition and lowering barriers to entry for British enterprise—clause 10, on capital allowances, clause 6, on corporation tax, and clause 73, on air passenger duty, to name but a few. Encouraging new entrants—those first-time entrepreneurs, employers and exporters—is vital in increasing choice for consumers and in keeping established businesses on their toes and responsive to their customers. This Government have slashed barriers to entry through deregulation initiatives—an ongoing process that I have been involved with on the Deregulation Bill Committee—and there is also the red tape challenge and the one-in, two-out regulatory arrangements. These are important steps in creating much-needed supply-side reforms.
I hope to contribute further on the Finance Bill Committee—if I can catch the Whip’s eye—because the barriers to small new businesses, new employers and new exporters have been kept far too high in the previous decade or more. We need to get on and finish the job and create a real enterprise pathway. There is little point in trying to address the problem of firms that are too big to fail if we do not also seek to address that of new businesses that are too small to succeed against barriers to entry that have been in place for far too long. This Bill helps us to take significant strides forward. In the words of the British Chambers of Commerce:
“By making a better business environment his top priority, the Chancellor has recognised that successful and confident companies are the key to transforming Britain’s growing economic recovery into one that is felt in homes and on high streets.”
It is the economics of strong, long-term measures for long-term growth.
The hon. Gentleman is making a very good speech. As somebody who represents the north-east corner of north Yorkshire, which is part of the north-east region, I am sure I can join in the north-east theme this afternoon. He talks about the drive to improve businesses. Does he agree that it is only through successful wealth creation that we can provide the public services that Opposition Members—and all of us—want to see?
Absolutely. Real growth and true wealth creation have to come from the private sector: that is how we generate the wealth needed to provide the public services that Members on both sides of the House welcome and want to help our constituents.
The Institute of Directors has described the Budget measures in the Bill as “responsible and imaginative” ones that will
“promote growth, exports and investment”.
It says that
“doubling the annual investment allowance…will bring forward a significant amount of investment…with knock-on effects across the economy”,
while
“increasing the cash value of Research and Development credits…will benefit many new businesses immediately”.
That will create the jobs we want to see and tackle the challenges of youth unemployment that Opposition Members have mentioned. Yes, we have had to consolidate the nation’s finances, but we have also signposted clearly the future direction of lower taxes. Although cutting air passenger duty, for example, has not been affordable in recent years, the Bill will very generously cut the two highest rates from 2015. This Government do not shirk from the difficult decisions that need to be taken to restore order to the national balance sheet. It is precisely this approach of taking long-term decisions that has allowed us to double investment allowances to £500,000 and to cut APD, which we have been able to do responsibly and affordably. I hope that business will respond by investing in export potential and taking advantage of lower flight taxes to get out and sell to the world. The barriers are down, and the pathways to achieving export potential are getting clearer. That is a clear priority of Members on this side of the House.
We are moving forward with corporation tax, too. Cutting it to the lowest level in the G20, the Bill will further improve our competitiveness in the international market. The new employment allowance will slash the cost of taking on a first-time employee. These are pro-enterprise, pro-competition measures that will create long-lasting benefits for the economy, for jobseekers and for our consumers. By making it easier and less expensive to deal with the state and to pay its taxes, the Bill also makes it easier for first-time entrepreneurs to become first-time employers and first-time exporters.
The Chancellor has promised to do all he can to boost our export performance. The CBI has noted that the increasing export finance stream announced in the Budget should “strengthen our armoury”, although it also agreed with something that Lord Young and Lord Green have already acknowledged, when it stated:
“The Government must now work much harder to promote these schemes, since many fast-growing firms are unaware of the support available.”
I know that the Government are acutely aware of that fact, but it is critical, now that we have the plans in place, that we do a better job of communicating with SMEs and telling them what support is available.
When customers are free to choose, businesses are required to innovate, to offer better service and to control their prices. When the state stands in the way of that market competition, prices are skewed and, in the longer term, the economy deteriorates. We have only to look across the channel to see where that path could lead—to plan B, as we might say—and to see what that strategy has delivered for France: rising unemployment and a budget deficit higher than had been predicted. We do not need to look across the channel to learn who would bring similar economic woes to Britain; we need only to look across to the other side of the House. Thank goodness that we on this side of the House chose to stick with the right plan. We now want to finish the job.
I was fortunate to attend the British Chambers of Commerce annual conference this morning. It was a positive start to what I am sure has been an excellent day for chambers of commerce across the country. The theme was “State of the nation—good to great”, highlighting the need for what was called “great growth”— growth that is sustainable and for the long term. It was a timely reminder of the most pressing economic priority facing the country. I am proud that this Government are firmly committed to meeting that challenge head on. The Budget and the Finance Bill are both further evidence of that commitment, and that is why I will support the Bill tonight.
(10 years, 8 months ago)
Commons ChamberI, too, congratulate the Government on bringing forward this important Bill. It was a pleasure to serve on the Bill Committee. I believe that the measures it contains will make a vital contribution to helping a cause that I believe in passionately: helping more people take on employees for the first time.
We have to get more of the growing band of self-employed people in this country to want to take on an extra employee and we have to overcome the barriers to that. Some 4.2 million people in this country are self-employed, which is 14% of the population, up from 12% at the turn of the century. The good news is that part-time self-employment is down and full-time self-employment is up, which is a good thing, because people are finding that it is a worthwhile form of employment and are making a contribution to the economy. The push factors in driving people to that form of employment are on the way down and the pull factors are clearly on the way up, and more young people want to get involved in self-employment.
However, the real challenge and opportunity that the Bill addresses is that of encouraging more of the self-employed to want to take on their first employee and helping people to see the benefits of working in that environment. Sadly, the pace of improvement in that area is not keeping up with the increase in self-employment. We need to help the self-employed to nudge open the barriers to becoming first-time employers and feel confident to take on employees, whether they are tangible barriers in IT, legal matters or human resources, or perceived, more psychological barriers such as their concerns about dealing with HMRC or about getting rules wrong in employing somebody.
In the Adjournment debate I held on this subject at the beginning of November, I talked through a whole series of options that we could consider to help address this challenge, but the most important thing to do today is to acknowledge that this Bill takes some vitally important steps in doing so. It will be a boost to first-time employees, whether they are apprentices, long-term unemployed, those who are economically inactive, or those who are looking for their second, third, fourth or even fifth careers.
The hon. Gentleman is making a good point. Does he agree that the businesses he is describing find it difficult to find the time to apply for complex reliefs, and does he therefore join me in welcoming the simplicity of these proposals?