Clause 164 - Extension of first-year allowances for ICT expenditure by small companies
Finance Bill
12:00 pm
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
Thank you for the WeightWatchers sweets, Sir Nicholas. I hope that they are magic and that all I have to do is to eat them to lose weight, because the Finance Bill does not seem to help me.
The allowances were originally introduced at the request of businesses, which lobbied strongly for them to be extended. In considering an extension, I was mindful of the points that the hon. Member for Arundel and South Downs and the right hon. Member for Fylde have made as to whether continuing the relief is the most effective way to support businesses or whether we should discuss with business whether other measures would now be more appropriate, especially if the allowance has matured to the point at which we need to move on and see what else would support business.
We could not complete or even properly air that subject before the Budget, so I considered it appropriate to extend the allowance for a year. However, hon. Members will be aware that in the Budget statement my right hon. Friend the Chancellor announced a consultation document on several aspects relating to small and medium-sized businesses. One of them was the significant matter of access to equity. During the conversations and consultation we must also try to address that issue. That is why the allowance is to be extended for one year only. That will give us time for proper consideration of whether an allowance is most appropriate. Obviously, businesses are keen on the allowances and they have been successful, but before making a commitment of more than one year it is appropriate, as the right hon. Member for Fylde suggests, to consider whether that is the best way forward.
I can confirm that, as the hon. Member for Arundel and South Downs suggested, the allowance applies to all small enterprises. The hon. Member for Huntingdon asked whether we had had any lobbying or complaints about the fact that the measure was announced at the time of the Budget. To my knowledge, the answer is no. Any small business that invested in ICT between 31 March and the Budget announcement nine days later will be eligible for the allowance under the clause, so we have not received any representations or complaints. Generally, the measure is popular, but businesses accept that it may well have run its course and it is right that the Government should reflect on that before taking any decisions.
I hope that that has given members of the Committee an indication of the way that the Government are considering the matter. Of course, the outcome may be that the allowances should remain, so I do not want to concern anyone. It is right to consider the matter again and ensure that it is the right way to support business—this year we believe that it is.
Question put and agreed to.
Clause 164 ordered to stand part of the Bill.