Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Amendment of the Law

Part of the debate – in the House of Commons at 4:20 pm on 23rd March 2011.

Alert me about debates like this

Photo of Stewart Hosie Stewart Hosie SNP Chief Whip, SNP Deputy Leader, Shadow SNP Spokesperson (Treasury) 4:20 pm, 23rd March 2011

I am glad that the hon. Gentleman has done the four-year forecast and the average for me, but the point is the same: there is very little money in what ought to be an initiative with the potential, at least, to deliver some significant economic investment.

We need targeted measures, and one measure that the Chancellor could have introduced today was targeted help for the computer games industry. A targeted tax break was suggested previously but pulled from the previous Budget. Debates in the Scottish Parliament have backed it, and debates in Westminster have had all-party support, but he rejected the idea in 2010 and rejected it today. He did say, however, that he would improve the intellectual property regime and increase the small companies R and D tax credit, and I look to understand from the Government at some point whether there is a specific way in which the video games industry and other growing high-tech industries might access it, and access it in an appropriate way that protects them and grows them in future.

In terms of targeted measures, we also believe that there was a compelling case for the Scottish Government to be given responsibility for the administration and revenues of the Crown Estate in Scotland, given the focus in Scotland and the UK on driving a low-carbon economy and the existing responsibilities for marine planning and economic development. This Budget provided the Chancellor with the opportunity to indicate that he was prepared to do that through Government amendments to the Scotland Bill, but no commitment was made.

The Chancellor could also have demonstrated—another small targeted measure—that he was prepared to adjust the tax treatment of participants and sponsors at the Commonwealth games in Glasgow in 2014 so that there was equality of treatment with participants and sponsors at the Olympic games in 2012. I know that the Scottish Government and others have contacted him on the matter, because it is important to the overall success of the 2014 games and to the economic regeneration of the east end of Glasgow, so I am deeply disappointed that, in a Budget when he had the opportunity to talk about parity of tax treatment, he did not take it.

I know also that, following the abolition of the end-year flexibility agreements with the devolved Administrations, a new system was to be introduced and the Chancellor intended to set out details in this Budget. They might be tucked away in a document I have not read, but there was no mention made of that at all, or of whether a new end-year cash reserve could be established so that end-year flexibility was maintained in a way that was beneficial not just to the Scottish Administration, but to Wales and to Northern Ireland.

The Chancellor spoke a lot about the green economy and about several measures that he intends to take, and, as the Economic Secretary and the Chancellor know, there is still accrued £195 million of fossil fuel levy that only the Scottish Government can use. It ought to be released, but under the current rules it cannot without a comparable claw-back from the block grant. This was the opportunity for the Chancellor to release those funds, but he missed it.

That is particularly disappointing in relation to the announcement about the green investment bank, which was supposed to be the alternative. In November 2010, in the Treasury Committee, I asked the Chancellor what the timing was for its establishment, and he said that he wanted to get it up and running as soon as possible. He said that he hoped to come forward with proposals on how it was going to be structured between now and Christmas and that he would have set aside money to go into the bank in the comprehensive spending review. It is therefore hugely depressing that we have to wait another year, until 2012, before it can start to function. Given the press coverage that I am sure we have all seen, it looks as though it will be 2015 before it is fully operational.

A further green disappointment is that there was no mention whatsoever of green individual savings accounts—a key Tory policy to be introduced within two years as a way of helping savers to benefit from the growth of the green economy, because the billions raised from their sale would fund the state-backed green investment bank. Yet it seems that because of objections they are to be dropped, choking off a funding stream that would have channelled an estimated £2 billion a year into green technologies. I do not know if the shutdown of green ISAs is part of a wider move to curtail the potential operations of the green bank before it is even set up, but it is extremely worrying. Finally on green issues, the carbon floor price was mentioned. I understand from those who know more about that than I do that it is, in effect, a secret subsidy to the nuclear industry, which is anything but green.

The Chancellor said that this was a Budget for growth, but growth will be stifled if the banks do not lend, and if he takes no action on alcohol duty. Growth will be restricted by his failure to reassess the cuts in capital expenditure, and the opportunity of enterprise zones will be squandered without the proper application of capital allowances. Growth sectors such as the games industry will be damaged by the refusal to introduce tax breaks. Growth in the green economy will be slowed because of the refusal to release funds from the fossil fuel levy, and investment in our green future will be reduced because of delays in setting up the green bank. The Chancellor took an hour to shuffle £10 million. It was a profoundly wasted opportunity when he could have done so much more.