We are making businesses more competitive by cutting business taxes, helping work pay by increasing the personal allowance and introducing universal credit, and helping unemployed people into work through our Work programme and work experience.
As someone who owned and ran a business, I welcome the reductions in corporation tax and the small profits rate already announced by my right hon. Friend, but a further area of taxation is business rates, where although the reliefs for small companies are very helpful, many businesses currently face a significant increase. Can anything further be done to help businesses in this respect?
I will not pre-empt any Budget announcements, but I will say that we have extended small business rate relief to 2013. We announced that in November, and it will help more than half a million small businesses, and we have also introduced a deferral scheme to help larger businesses with their cash flow, so we are doing other things as well as reducing corporation tax—a further reduction in corporation tax is planned for April, of course—and cutting the small companies tax rate, which was due to go up under the previous Labour Government.
The recent changes in research and development tax credits will provide a major boost for hi-tech manufacturing businesses based in my constituency and near it, such as Moog and Goodrich. What more can my right hon. Friend do to help generate more high-skilled, well-paid jobs in the manufacturing sector?
I have been very encouraged to hear about the success of companies in my hon. Friend’s constituency, including the two that he mentioned. We will provide further details later this year on the R and D “above the line” tax credit, on which we have listened to representations from industry and Members of Parliament. In the vicinity of my hon. Friend’s constituency, we also have the enterprise zone i54, which will start up in April. More generally, this is a week when 20,000 new jobs have been announced by Tesco and we have heard the great news that Nissan will produce a new car in the UK. There are some encouraging developments in the British economy.
Is the Chancellor not aware that his measures are not working? In the last quarter for which we have figures, set against a 67,000 drop in public sector employment there was a welcome but very modest increase of only 5,000 jobs in the private sector. Why not do something bold and positive in the Budget, such as taking one of our proposals, rather than rejecting it out of pride, to expand the national insurance holiday to cover all small companies that take on new employees, rather than just the relatively small number of new small companies?
I have noticed in the Budget representations from Labour Members that they are always very good at suggesting things we can spend money on but never have any ideas about how to save money, despite leaving us with the largest budget deficit in our peacetime history. They are all over the place: one week it is a tax cut, the next it is a spending increase. The truth is that we need economic credibility. The budget deficit is coming down but it is still far too high. Of course, we will not have the unfunded giveaways that got this country into a mess under the previous Labour Government.
At the budget a year ago, the Chancellor published his “Plan for Growth” with the rhetorical flourish that it would create
“a Britain carried aloft by the march of the makers.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]
A year later, we can see that he has achieved less than half of the downgraded growth forecast made at the time. We had a shrinking economy in the last quarter with—and this is true—only one private sector job created for every 13 public sector jobs lost. Looking back at the past year, where did his plan go wrong?
We have secured for this country economic credibility and stability in the most intense global storm, with the eurozone crisis and rising oil prices. Of course it is difficult, but where is the credible economic policy from the Labour party? It is completely absent. Is it not striking that we have not had a single Labour MP get up and talk about the good news from Nissan today? The car is called the Invitation, but the only invitation the hon. Gentleman is interested in is one to the lasagne parties held by the shadow Chancellor.
14. Does the Chancellor agree that the national loan guarantee scheme has massive potential to help small and medium-sized enterprises grow? Does he also share my view, however, that we need a more enlightened approach from the banks in lending for growth, particularly to support start-ups, exporters and manufacturing? (98012)
We have introduced various tax changes, including our seed capital scheme, creating the most tax-advantaged start-up environment almost anywhere in the western world. Indeed, it is more attractive than that in the United States. On credit easing, I can confirm that subject to final EU state aid approval, which we expect to get in the next week, we will have the scheme up and running before the Budget.
Is the Chancellor aware that while fiscal policies are being used to create jobs, HMRC, through its hard-line attitude towards many small businesses with cash-flow problems, is driving people out of jobs and firms to the wall? What can he do to avoid the continuation of the situation in Northern Ireland, where 55% of bankruptcies in the past four years have been initiated by HMRC?
I think the figure that the hon. Gentleman cites, across the whole UK—I shall come back to him with the specific figures for Northern Ireland—has been roughly the same for many years. Many bankruptcies are ultimately caused by the taxpayer because the tax bills are the last thing that a company cannot pay, and that has been true in good times and bad. We have continued with the time to pay scheme, which was introduced by the previous Government during the recession, and we are making every effort to help viable businesses with their cash flow and to help them pay their taxes, which benefits everyone, in a way that keeps them afloat.
I am sure the Chancellor is aware that it is not just Nissan that we have heard good news about. Last week, Center Parcs announced that it had been able to secure £250 million-worth of investment to build a new Center Parcs in my constituency, creating 1,700 ongoing jobs and 1,500 jobs in construction. Does the Chancellor agree that tourism is an ideal way to attract inward investment into the UK and that it is an area we should be looking at to create jobs in the private sector?
The announcement was very welcome. I commend my hon. Friend for taking an enlightened attitude to development in her constituency, which is not always the case. When it comes to tourism, we have authorised a big increase in the advertising campaign that is currently going around the world to sell the UK in this very special year when we have the Olympics and the jubilee. We want a permanent increase in tourism as a result of those events.