I welcome the Budget. It is a Budget for business and I am pleased that it is particularly good for micro-businesses, which have done especially well.
Today, we are talking principally about housing, where what the Government have done is commendable, but unless people have jobs and earn good salaries they will not be able to take up those good initiatives. The highlight is the employment allowance. The national insurance win is £2,000 off the employer’s NI bill. In my book, the Government could not have done anything better. That really plays to the agenda of micro-businesses. It enables them to get started. A very small business will be able to take on its first employee.
Many of the smallest businesses are run by women, so the reduction in child care costs in 2015, when 20% of the costs for the under-12s will be met by Government, is very welcome. For the first time, there is something that will help women running their own business; it will help the self-employed, not just those who are employed.
Many small businesses are in rural communities, and fuel is a huge issue. The fuel duty freeze is absolutely what this country needs. In September, petrol prices will stay the same and that is welcome. Clearly, we need to look at making fuel duty and the price of petrol predictable. Perhaps in a future Budget there will be an opportunity to look at a proper stabiliser, whereby when the price of fuel goes up, the tax comes down. Stability is vital, especially for small businesses. Likewise, a rural rebate on fuel duty would be welcome in some of our more out of the way communities.
The measure that will take corporation tax down to 20% faster and align it with the small companies rate is very welcome. I encourage the Chancellor and his team to look at what we could do to make that even easier for the very smallest companies. Perhaps he would support my all-party group working with the Office of Tax Simplification on the concept of a new flat tax for the smallest businesses, through the format of the business structure, so that whether it is a company, a sole trader or a partnership, there is a new mechanism. I appreciate that corporation tax as currently structured cannot fall below 20% because it would then be at the same rate as income tax, which would give rise to all sorts of problems, including people rushing to incorporate when it was not the right thing for them.
Here is another thought for the Chancellor for his next Budget: for the very smallest businesses, business rates can really cause a problem. I should like to see in the next Budget an extension of small business rate relief until the election, as that would be extraordinarily welcome. The Government could also look at trying to show those businesses that are paying business rates what they get for their money. The Chancellor and his team have been keen to enable those of us who pay income tax to see where that income tax is going, but the same argument ought to be true of business rates. Many business people say to me, “But I don’t get my bins emptied in the same way that I can see is the case if I pay council tax.” We should look at where those business rates go, and show the value for money that businesses obtain in paying them.
I had an interesting meeting last week with the valuation office. I asked it whether there was a way of making the valuation process fairer and, as I understood the explanation, it appears that the technology is there to enable revaluation to take place more frequently. A frustration that businesses share with me is that because of the time line—there is a five-year gap—there is a big difference when the valuation is made and when people have to pay the new rate. I would not wish to underestimate the challenge, and I appreciate that the multiplier makes that not entirely straightforward.
That, for me, is the key to getting the country to move forward—helping our micro-businesses—and I welcome what the Chancellor’s team have introduced. I am delighted. Well done, and I hope that the Chancellor will perhaps take on board some of the thoughts that I have set out for the next Budget.