Clause 30
Finance (No. 2) Bill
4:30 pm
Julia Goldsworthy (Shadow Chief Secretary To the Treasury, Treasury; Falmouth and Camborne, Liberal Democrat)
Amendments Nos. 60 and 61 are probing amendments dealing with the proposed changes to the time scale to which the increase in the amount of allowance for small enterprise applies. Clause 30 proposes to increase for one year the first-year capital allowance for spending by small businesses from 40 per cent. to 50 per cent. The amendments propose to increase that time to two years.
I seek the rationale behind the Government’s decision to propose the increase for only one year. I should be interested to know the Minister’s opinion on how capable small businesses are of responding to relatively small and rapid changes. If the changes proceed as proposed by the clause, that will represent year-on-year change in the capital allowance for four years. I have received many representations expressing concern that that uncertainty will undermine business confidence about how the allowances can be used. Has the Department assessed how such a small temporary change will affect small businesses’ behaviour?