Oral Answers to Questions

Mel Stride Excerpts

Tuesday 9th March 2021 Commons Chamber

[Rishi Sunak]

With regard to VAT, I am sure the hon. Lady knows that the majority of businesses in the personal care sector are below the VAT threshold, so they do not actually pay any VAT. What we did do is include that sector in the more generous restart grants, so, depending on their rateable value, businesses in that sector, like those in hospitality, will be able to receive grants of up to £18,000.

[Mel Stride (Central Devon) (Con) [V]]

I very much welcome my right hon. Friend’s announcement in the Budget of the super deduction, which will definitely have a very positive impact on investment. Of course, it will primarily do that by pulling forward what would have been future investment into a more recent time period. What measures is my right hon. Friend looking to, to ensure that that increase in corporate investment in the shorter term is continued into the medium and longer term?

[Rishi Sunak]

I am glad my right hon. Friend recognises the importance of the super deduction. He is right that it will bring forward investment, but I believe it will also increase the amount of investment as well, given the attractiveness of doing so. What I would point him to are a couple of other announcements in the Budget. One is a consultation to reform our research and development tax credits regime, which we hope to conduct over the course of this year to make sure of support for investment in R&D in a way that reflects current R&D practices. Secondly, our freeports agenda contains enhanced capital allowances, and structures and building allowances, which last well beyond the period of the super deduction and will serve as an incentive for capital investment in those areas for years to come.