Clause 30
Finance (No. 2) Bill
4:30 pm
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
The hon. Gentleman tempts me down a route of metaphor that I do not wish to exploit further. We had too many ironing metaphors this morning for me to risk continuing with that train of thought. [Interruption.] I know that the Economic Secretary to the Treasury is getting excited because he is on the next chapter of the Bill, but it might be better for him if he can just control himself for a moment and hold his firepower for that stage—I should like to give him that advice from the Opposition side.
I want to comment briefly on clause 30 and pick up on the point that the hon. Member for Falmouth and Camborne (Julia Goldsworthy) made about the fluctuating fortunes of the rate of first-year allowances. It is worth remembering what has happened since 1998. From 1998 to the fiscal year 2003-04, first-year allowances were 40 per cent., and there was a nice period of stability, but in 2004-05 they went up to 50 per cent., in 2005-06 they went down to 40 per cent., in 2006-07 they will be at 50 per cent., and in 2007-08 they will go down to 40 per cent.
The hon. Lady suggested that the 50 per cent. rate should continue for two years. However, if small businesses are to expand, invest capital and take on some of the challenges that have been discussed in the debate, they need some stability and predictability in the first-year allowance rate. How can a business plan confidently for the future, taking into account the incentives offered by the Government, if it is difficult to predict the level of first-year allowances from year to year? Will the Minister therefore give some indication of the Government’s thoughts on how long the 50 per cent. rate will continue and when there will be stability on first-year allowances?