Amendment of the Law

Richard Burden Excerpts

Monday 26th March 2012 Commons Chamber

[Richard Burden (Birmingham, Northfield) (Lab)]

In my constituency at the weekend, I found that the thing that really stuck in the craw of my constituents was not that the Government had avoided making choices but that they had made the wrong choices, on the wrong things, in a really unfair way. Last week, Government Members were not waving their Order Papers in support of a Budget that redistributed from the have-a-lots to the have-nots. The have-a-lots did very well out of it, as we know from the changes to the top rate of tax. To the extent that there was any redistribution to the have-nots, it was from the have-a-bits, and when that happened, the have-nots got hit anyway by the fact that the VAT increase is still in place and by the cuts in services that will be taking place in the coming years. Government Members might think that they avoided a cliff edge in relation to child benefit, but I rather suspect that over the coming months and years they will witness a slow-motion car crash as the anomalies and inequities become clearer.

On growth and innovation, the Government did not get it all wrong; they have done some useful stuff in relation to the creative industries. I am pleased that they have listened to the motor manufacturers and others who have been calling for an R and D tax credit above the line and for that to be expanded. The Government have got that right, and I welcome that; I just hope that they get on and do it quickly. However, they could be doing so much more to stimulate innovation and growth. I do not share the view of Mr Peter Cruddas, who thinks that the way to make one’s business awesome is to give £250,000 to the Conservative party and allow the party to trouser it. There are other ways to do it, such as making more significant changes to credit or getting demand up. Government Members need to think again about whether blanket cuts in corporate tax are going to add to growth, because that treats businesses that make things and innovate in exactly the same way as businesses that only make profits. Just saying that the bank levy has gone up does not address that fundamental problem.

I take it with a pinch of salt, therefore, when the Chancellor boasts that the corporation tax changes leave our corporation tax rate 8% lower than Germany’s. We have a lot to learn from what Germany has done over many years. It has networked industrial and finance capital, and has had consistently higher investment and consistently higher rates of growth. That will happen in the future as well. When the Chancellor boasts of protecting the science budget, I want to know why Britain cannot ensure that there is a 10% increase in the science budget, as Germany will in the years ahead.

The director of the Campaign for Science and Engineering has said that

“simply reversing cuts isn’t going to be a game-changer for the UK. We need to be far more ambitious if we’re serious about having a high-tech future.”

I am serious about that, as are Opposition Members. The Budget, frankly, is not serious about that.