Clause 24
Finance Bill
5:15 pm
Stephen Timms (Financial Secretary, HM Treasury; East Ham, Labour)
The clause is part of our package of targeted support for business—temporary tax relief providing real support for businesses investing for the future. The cost is substantial, as the hon. Gentleman said, and its scale reflects our recognition that business investment is key to recovery. The measure will stimulate and bring forward business investment. It is time-limited because we recognise the exceptional nature of the current downturn and want to support and encourage businesses to invest now. My right hon. Friend the Chancellor of the Exchequer said in his Budget speech that we must grow rather than cut our way out of recession, and this measure is one building block we have in place to do that.
The hon. Member for Fareham queried the balance between the cost of the carry-back measure that we debated a few minutes ago and this first-year capital allowances measure. The balance reflects the importance of encouraging investment at this point in the downturn to move us into recovery as quickly as possible. At this critical time, it is absolutely right to support businesses and their cash flow, including through the loss carry-back measure, but it is perhaps more important to provide an incentive to invest, which this measure will do.