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Amendment of the Law

Part of the debate – in the House of Commons at 9:11 pm on 29th March 2010.

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Photo of Stephen Timms Stephen Timms Parliamentary Under-Secretary (Department for Business, Innovation and Skills) (Digital Britain) (also HM Treasury), Financial Secretary (HM Treasury) (also in the Department for Business, Innovation and Skills) 9:11 pm, 29th March 2010

We have had a good debate, on the whole, on crucial matters for the economy. We have come through the most severe and synchronised downturn since the great depression. Thanks to the action that the Government have taken, the damage suffered in the UK has been a great deal less than we suffered in previous recessions and were expected to suffer in this one. Now the world economy is returning to growth. We are in the early stages of recovery, but as we can see by looking around Europe, the recovery is still fragile. Germany returned to growth in one quarter and then went flat the quarter after that. Italy returned to growth, but went back into negative growth the following quarter. Spain is still to come out of recession.

As we forecast, the UK economy returned to growth at the end of last year, but the remaining uncertainties underline the need for support for the economy to continue until the recovery is secure. When we reduce our borrowing-as we must-we need to safeguard the front-line services on which people depend. We must ensure that future industries can grow, and promote innovation to provide opportunities and skilled jobs. In that way, we can secure strong and sustainable growth in the future.

Throughout the crisis, the Government have acted to support the economy, families and businesses. Several hon. Members referred to the tremendously successful time to pay scheme, which has given more than 200,000 businesses more time to pay more than £5.2 billion in tax so far. That success has convinced us to continue to offer that scheme to viable businesses having difficulty in meeting their tax obligations, at least through the next Parliament. Some £900 million of support has been delivered to almost 9,000 small and medium-sized enterprises through the enterprise finance guarantee. The small companies' rate of corporation tax will remain at 21 per cent. for the coming year.

We can see the difference that all this support has made. Unemployment reached not 3 million but 1.6 million -and it has come down in the last few months. Home repossessions are much lower than in the 1990s recession, and much lower than was projected at the beginning of last year. The rate of company liquidations has been a third of what it was in the 1990s recession.

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