All 3 Debates between Richard Fuller and James Cartlidge

Oral Answers to Questions

Debate between Richard Fuller and James Cartlidge
Tuesday 21st March 2023

(1 year, 9 months ago)

Commons Chamber
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James Cartlidge Portrait James Cartlidge
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To give just one example of why we should be confident, last year 40% of our electricity came from renewables. The figure in the United States was 20%. We have a very strong record, but we are going to keep building on it. That is why we announced the £20 billion for carbon capture and storage and why we announced Great British Nuclear, because we need that baseload power to go alongside renewables and give us energy security.

Richard Fuller Portrait Richard Fuller (North East Bedfordshire) (Con)
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The truth is that it is under this Conservative Government that the greatest strides have been accomplished in harnessing the British economy to achieve net zero, with the leadership of COP26, the establishment of the Glasgow Financial Alliance for Net Zero, and the introduction of corporate reporting on carbon emissions for our major corporations. Will my hon. Friend work with British business to continue that progress and ensure that we can all move forward successfully to achieve net zero?

Finance Bill

Debate between Richard Fuller and James Cartlidge
James Cartlidge Portrait James Cartlidge
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My hon. Friend is extremely astute: he has noted the significant contribution these taxes will make to the Exchequer. As I have just said, although this generous allowance is to ensure that we still encourage investment at a time when energy security is critical and where the long-term solution is having secure energy in this country, he is right to highlight the revenue being raised. After all, it goes a long way to funding the support that our constituents are receiving. In fact, they are receiving it this very week: payments are going out to support people facing these very high energy bills. The energy support guarantee this winter will save a typical household £900. We are putting in place extensive support, and as my hon. Friend says, a significant amount of that revenue comes from this new tax.

Putin’s barbaric illegal invasion of Ukraine and the utilisation of energy as a weapon of war has made it clear that we must become more energy self-sufficient. That is why this Bill also ensures that the levy retains its investment allowance at the current value, allowing companies to continue claiming around £91 for every £100 of investment. This investment will support the economy and jobs while helping to protect the UK’s future energy security, and in future the Government will separately legislate to increase the tax relief available for investments which reduce carbon emissions when producing oil and gas, supporting the industry’s transition to lower-carbon oil and gas production. Together these measures will raise close to £20 billion more from the levy over the next six years. As my hon. Friend said, that brings total levy revenues to more than £40 billion over the same period—of course he added on top of that the electricity generators levy, which we will be consulting on. The Government are also taking forward measures to tax the extraordinary returns of electricity generators, as I have just said, but we will do so in a future Finance Bill to ensure that we can engage with industry on these important plans.

The autumn Finance Bill also introduces legislation to alter the rates of the R&D tax reliefs. Making those changes will help to reduce error and fraud in the system, ensuring that the taxpayer gets better value for money while continuing to support valuable research and development needed for long-term growth. Over the last 50 years, innovation has been responsible for about half of the UK’s productivity increases. That is an extremely important statistic. We all know the value of R&D to all of our constituencies—I look in particular at my hon. Friend the Member for South Cambridgeshire (Anthony Browne), who will know of its importance in our university cities and all of our key clusters. R&D is a key way of raising productivity, which is why we have protected our entire research budget and will increase public funding for R&D to £20 billion by 2024-25 as part of our mission to make the United Kingdom a science superpower. These measures are significant, but ultimately businesses will need to invest more in R&D. The UK’s R&D tax reliefs have an important role to play in doing that.

Richard Fuller Portrait Richard Fuller (North East Bedfordshire) (Con)
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The Government are absolutely right on this point. The objective of giving taxpayers’ money to companies for use through R&D tax credits is to focus on improving productivity. There were real concerns, particularly in the smaller business segment, that the scheme was not working correctly. One aspect of the scheme that caused some concern to small businesses was the time that it was taking for some credits to be paid out, but I think that is improving. Perhaps in summing up later, the Financial Secretary to the Treasury could point to what recent progress has been made on that.

James Cartlidge Portrait James Cartlidge
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I am grateful to my hon. Friend. Of course, he was in the Department and has a business background, so he knows the detail and the importance of R&D tax reliefs. I am sure that my hon. Friend the Financial Secretary to the Treasury will have a chance to look at that later. I believe that we will be having a meeting about a separate issue of concern—a certain railway project that matters to him—when we can also discuss these points.

I turn to the specific detail. For expenditure on or after 1 April 2023, the research and development expenditure credit rate will increase from 13% to 20%. The small and medium-sized enterprise additional deduction will decrease from 130% to 86%, and the SME scheme credit rate will decrease from 14.5% to 10%. That reform will ensure that the taxpayer support is as effective as possible. It improves the competitiveness of the RDEC scheme and is a step towards a simplified RDEC-like scheme for all.

That means that Government support for the reliefs will continue to rise in cost to the Exchequer—from £6.6 billion in 2021 to more than £9 billion in 2027-28—but in a way that ensures value for money. To be clear, the R&D reliefs will support £60 billion of business R&D in 2027-28, which is a 60% increase from £40 billion in 2020-21. The Government will consult on the design of a single scheme and, ahead of the spring Budget, work with industry to understand whether further support is necessary for R&D-intensive SMEs without significant change to the overall cost.

--- Later in debate ---
James Cartlidge Portrait James Cartlidge
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The furlough scheme, on its own, protected 11.5 million jobs. Does the hon. Gentleman seriously think that the Government should expand some extraordinary array of resource to find out what those 11.5 million people did with the money that kept them in work when they could have been looking at unemployment, and we could have been facing the most staggering economic depression in our history? We avoided that and, instead, we reduced unemployment by 2 million more than was expected. We avoided that cut in jobs, which would have been absolutely devastating for communities across the country, and we should all be grateful.

James Cartlidge Portrait James Cartlidge
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I have already given way to both my hon. Friends, but I will go to Bedfordshire.

Richard Fuller Portrait Richard Fuller
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That is certainly the best place the Minister can go. He is always welcome in North East Bedfordshire.

The Minister will remember that the additional rate of tax was introduced as a temporary measure by Gordon Brown. When the Conservatives came into government in coalition in 2010, we looked forward to its being scrapped—yet here we are today, proposing that more people on lower incomes, in nominal as well as real terms, be made to pay that additional rate of tax. With the basic allowance tapering off above £100,000, and with the introduction of this rate, does the Minister accept that people in this country who earn more than £100,000 now face effective tax rates of 60% or 50%?

James Cartlidge Portrait James Cartlidge
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As a Conservative who wants taxes to be lower, I do not stand here with any relish in putting forward a Finance Bill that will increase taxes. The Chancellor was very clear that we will have to pay more tax, but my hon. Friend understands the aggregate reason, I hope, which is the need for fiscal stability. The overall rate will have an impact of £1,200 a year, as I have said; I do not deny that it will be significantly impactful for our constituents. We want to cut taxes if we can, but before we do so we have to get on top of inflation.

I give way to my hon. Friend the Member for Eastleigh (Paul Holmes).

Oral Answers to Questions

Debate between Richard Fuller and James Cartlidge
Tuesday 15th November 2022

(2 years, 1 month ago)

Commons Chamber
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Richard Fuller Portrait Richard Fuller (North East Bedfordshire) (Con)
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The Bedford to Cambridge section of East West Rail is rated “unachievable” by the Infrastructure and Projects Authority and a “waste of taxpayers’ money” by the Business Secretary, and growth in the Ox-Cam arc does not depend on it. Can the Chancellor use the autumn statement to finally clear the uncertainty around this deeply flawed project?

James Cartlidge Portrait James Cartlidge
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I paid tribute to my hon. Friend’s huge business experience and his time at the Treasury on Second Reading of the UK Infrastructure Bank Bill. Perhaps we should both read the report that my hon. Friend the Member for Milton Keynes South (Iain Stewart) referred to earlier, because as my hon. Friend the Member for North East Bedfordshire (Richard Fuller) knows, we strongly support the growth potential of the Ox-Cam arc. After all, that part of the country is internationally competitive, so it is the sort of place that we need to grow if we are to compete internationally.