Finance (No. 2) Bill

Stephen Hammond Excerpts

2nd reading
Tuesday 13th April 2021 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

It is a pleasure to follow the hon. Member for Swansea West (Geraint Davies). Before I begin my short remarks on the Finance Bill, I would like to put on record—because I was not able to be here yesterday—my condolences and those of my constituents to Her Majesty the Queen on the death of the Duke of Edinburgh.

This Finance Bill follows a year of unprecedented economic disruption unknown in the modern era, as well as a year of unprecedented support from the Government to business and individuals, ensuring not only their jobs but their lives and livelihoods. That has been true for millions of citizens, including those in my constituency of Wimbledon. This Finance Bill therefore needs to enact measures that ensure not only that our economy is in a place from which to recover and bounce back, but in one from which we can also see sustainable future growth—growth that is clean and green.

We all know the OBR forecasts that were set out in March; I will not reiterate them now. What is clear to me from reading economic commentators since then is that people are now expecting the economy to grow more quickly and more strongly, and for that recovery to be more sustained. That must be in large part due to measures in the Finance Bill that build the necessary confidence and give people necessary security for the future, including the extension of the universal credit uplift; the one-off £500 to those on working tax credit; the job retention scheme; and the self-employment income support scheme. All those measures are combined with the restart grants of up to £6,000 for non-essential retail and £18,000 for hospitality businesses. Those provisions are now extended to my constituency; initially the £51,000 threshold was not in place. I have to say to the Treasury Bench that I am extremely grateful on behalf of the hospitality industry in Wimbledon.

My hon. Friend the Exchequer Secretary to the Treasury will not be surprised that I wish to make two very quick points about the people who have been left out. First, I make the plea yet again on behalf of the English language teaching sector. Those schools received no support and are hugely important to constituencies across the country. Secondly, I know that my hon. Friend will have read clause 117 and schedule 29 on the prevention of tax avoidance and promoters of tax avoidance schemes. The explanatory notes state:

“This clause and Schedule have also been introduced in order to see the responsibility for the obligations within POTAS, and for any failure to comply with them to be placed on the people and entities behind the schemes.”

I have to say to my hon. Friend that a number of us have stood up for what we believe to be hard-working small businesspeople who have been in those schemes and recommended those schemes, and we feel that if that clause had already been in place, many of those people may not be suffering from the problems of the loan charge now. Even at this late stage, if she has the chance to talk to colleagues about this issue, we would be very grateful.

It is clear that we need a Finance Bill that looks at investment and improving infrastructure, so that we see improvement in productivity. I listened carefully to the remarks of my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami), who set out the clear economic rationale for the super deduction. It is a vital measure to encourage business to invest now. Historically, the UK has underperformed; we have failed to invest at similar levels to our economic peers. It is investment that drives some of the factors that I mentioned a moment go when it comes to improving productivity. Therefore, supercharging investment through a super deduction means that we are likely not only to strengthen, but to lengthen the economic recovery. That seems an entirely sensible, welcome and rational economic measure.

It is also likely that we want to see measures that improve not only physical infrastructure and capital formation, but human formation. I particularly welcome the support for new apprentice hires in the Bill. I encourage the Government to think a bit more about this, as it is the way of the future. Could we not link the new apprentice scheme to, for instance, the length of the super deduction? The super deduction is in place for two years, while the new apprentice scheme is in place for six months; I encourage the Government to think about linking the two. I know that my hon. Friend the Minister will recognise that human capital formation and investment in skills are as important as physical formation.

Like many colleagues, I was fascinated to hear the contribution from my hon. Friend the Member for Mid Norfolk (George Freeman), who spoke at length about driving growth through innovation and the adoption of new technologies. Of course he is right. When one talks to a number of the people at whom the super deduction is aimed, one learns that it will be commonplace—it almost is now—that they will be investing in things such as AI, 3D printing and big data. Alongside that, we will need a workforce that has in-demand skills, so I particularly welcome the investment in digital skills and the lifetime skills allowance that the Bill will introduce.

Many Members have referred to the freeports policy, which clearly brings the opportunity to boost jobs in regions and to boost economies through the use of differing tariff regimes for different sectors. My hon. Friend the Minister will know the principal criticisms of freeports—that they merely redirect economic activity and investment.

May I talk about next year’s Finance Bill, Madam Deputy Speaker, just for a very brief moment?

[Madam Deputy Speaker (Dame Eleanor Laing)]

This is a debate on this year’s Finance Bill.

[Stephen Hammond]

I urge the Government to think about learning the lessons of economic history in respect of the power of putting wider economic development zones and the encouragement that they bring alongside freeports. We all recognise that such zones need seedcorn grants from the Government; that could give the Government the opportunity to consider local recovery bonds. We have already seen the prospect of the green infrastructure bond; why do we not see some local recovery bonds to sit alongside that work and boost economic development zones? That would seem to me to be a perfectly sensible development.

The Chancellor is absolutely right to focus on infrastructure spending and investment. Infrastructure is not an end in itself—it is the driver of growth and productivity—so the policies coming through and the measures in the Bill to allow the increase in transport spending and in departmental spending limits are welcome. I also welcome the establishment of the UK infrastructure bank. It is the private sector that will drive the investment that is necessary.

As I said a moment ago, the green gilt is welcome, but just as I urge the Government to think about local recovery bonds, I urge them to think about an infrastructure bond. As many will know, there is a consultation on the capital cap for pension funds; if that change is combined with an infrastructure bond, we could see a wealth of pension funds looking to invest in the UK’s economic recovery.

Finally, the jewel in our crown is undoubtedly financial services. A few moments ago my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) talked about the need for mutual banking and to encourage small banks. I urge the Government to think about a review of the regulation of financial services and banking to ensure that the regulation with regard to conduct and capital is competitive and appropriate. That will drive not only those sectors but the investment that will sustain the economic recovery that everyone in this House seeks.