Finance (No. 2) Bill

David Warburton Excerpts

Monday 11th April 2016 Commons Chamber

[David Warburton (Somerton and Frome) (Con)]

This Finance Bill will go a long way to ensuring that there is no thumb on the scales that balance the interests of small businesses and multinational companies. In that sense, it is a Budget of direct redistribution, but there are ways of extending that principle further. The £9 billion gained through restrictions on interest deductibility, the strengthening of withholding tax and the hybrid mismatch rules all mean that a great deal will be ploughed back to provide support for small business. That is great news for someone such as me, coming here after a career in small business and now chairing the all-party groups on small business and on micro-business. In fact, anyone who has run a small business will know that business rates can take up an intimidatingly large proportion of fixed costs. The changes in those, together with the cut in corporation tax, are very welcome, recognising both the value of small businesses as employers and the fact that they are the engine of growth.

I think that the revised business rates will be of enormous benefit to companies in the glorious south-west, where small businesses are not just economic units, but power the communities that surround them. As well as, apparently, having more cows than any other constituency —of which we are very proud—Somerset and Frome consists of a constellation of 140 small towns and villages, many of which pivot around, and depend on, a single company or enterprise. For that reason, we need to recognise the significance of the number of jobs that have been created in the last six years, and the fact that there has been more rapid growth in jobs than at any time since the second world war. That is not just some abstract figure, but a reflection of tangible improvements in conditions for local businesses, and, therefore, for the people who depend on them.

That entrepreneurial spirit also shows itself in the so-called sharing economy, another economic sector that greatly helps those in rural areas. The tax-free allowance of £1,000 for online micro-entrepreneurs is a small but welcome step. A number of community energy and transport projects in my constituency will benefit from those incentives, and from the fact that the allowance recognises the important role that they play. Of course, a great deal more can be done. However, a Budget is not a governmental wish list, but an opportunity to match aspiration with reality.

Along with, I am sure, many Members in all parts of the House, I have recently received a fair bit of correspondence suggesting that reducing foreign aid would give us more scope for domestic expenditure. That is certainly true in purely economic terms, but what would be the moral cost? As of last year, the money provided through British foreign aid has vaccinated 55 million children against preventable diseases, given 50 million people the means to work their way out of poverty, saved the lives of 50,000 women in pregnancy and childbirth, and helped to prevent a colossal 10 million children from going hungry. We must, of course, take every possible step to ensure that the money goes to the vulnerable rather than to some kleptocracy or other, but that is a question of means rather than ends. We are the fifth richest country in the world, and I believe that our continuing commitment to foreign aid is a recognition of the humanitarian duties that accompany such a position of relative strength.

I think that the Bill’s approach is hugely positive. It incentivises and empowers individuals and small companies, properly addresses corporations that skip around in the no man’s land between tax avoidance and evasion, bridges the gap of generational unfairness with the lifetime ISA, and reaffirms our commitment to those who suffer from abject poverty abroad, while continuing to facilitate our economic recovery at home.

During one of the debates on the Budget, my hon. Friend the Member for Tiverton and Honiton (Neil Parish) summarised the priorities for the south-west as

“Rail, road, housing and broadband”.—[Official Report, 17 March 2016; Vol. 607, c. 1144.]

I could not agree more, and I am delighted to see the recognition of all those priorities in the financial measures that the Chancellor has set out.

I should also mention the commitment of half a billion pounds to speed the introduction of a fair national funding formula for schools. Many of us have campaigned for such a formula for some time, and it will benefit many schools in my constituency. There has been a long-term imbalance, and it is a relief to see the Chancellor commit himself to righting it.

Despite international pressures, our economy continues, by any comparative measure, to develop strongly. I believe that the Bill will enable small businesses to go on powering the jobs, and therefore the growth, on which we really depend.