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Budget Resolutions and Economic Situation — Amendment of the Law

Part of the debate – in the House of Commons at 4:56 pm on 22nd March 2016.

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Photo of Seema Kennedy Seema Kennedy Conservative, South Ribble 4:56 pm, 22nd March 2016

Since 2008, all developed economies have struggled with low confidence, lack of investment and sluggish growth. How each finance Ministry has responded to that challenge is quite clear from the growth and unemployment rates of our competitor economies.

The long-term economic plan is not just a slogan; it is a plan that we can be proud of. Since 2010 it has delivered for our constituents record levels of employment, stable interest rates and low inflation. Those are not just dry, dusty economic terms. They mean that in our constituencies, people have jobs; that we are not seeing mass house repossessions like we did in previous recessions; and that savings have kept their value. We have only to look at countries that are almost on our doorstep, such as Greece, to see that mass unemployment has massive social consequences when Governments lose control of their economies.

Our economy still faces great challenges. My hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) talked about access to finance and investment, and I want to touch on those measures briefly. Many colleagues have quite rightly pointed out that cutting taxes leaves businesses with spare cash to invest. That leads to more recruitment and more tax take; it is a virtuous circle. I very much welcome the cut in corporation tax, and I disagree with George Kerevan that we do not need to cut it any further because it is already low enough.

I welcome the 10% rate on long-term investment in small cap companies. We need to do more to foster a culture of long-term investment, and the Budget goes some way to addressing that. Access to finance is still a barrier for some businesses. I was glad to see that the British Business Bank will carry on supporting SMEs through the Help to Grow programme from this spring, supporting at least £200 million of lending, and that the enterprise finance guarantee programme will be extended until 2018.

I have long been troubled not only by the brakes on investment but by the barriers to entry that prevent entrepreneurs from starting up in the first place. Business rates are one such barrier, because they are a fixed cost paid by businesses before they even start up. When I have spoken to small businesses in my constituency, they have welcomed the extension of small business rate relief. I also welcome the discussion paper on the revaluation of properties for business rates, because the three-year cycle will fit in a lot better with standard rent reviews.

I welcome most the changes in stamp duty land tax for commercial properties. Again, this tax is a barrier to businesses opening or expanding. In my previous life as a commercial property solicitor, I saw small businesses unable to open or grow because of the stamp duty land tax, or they adopted avoidance behaviours, which did not help anybody.

I want to speak briefly about investment infrastructure in the north, which I feel passionate about. We need more investment, particularly in east-west connections. I respectfully ask Treasury Ministers if there could be some money in the next Budget for the Ribble bridge.

The aim to have £1 trillion of exports by 2020 will boost our economy, and the investment in UK Trade & Investment is most welcome. Yesterday was the festival of Nowruz, when Iranians celebrate their new year. I very much welcome the fact that my right hon. Friends the Chancellor and the Business Secretary will visit Iran in May, and I wish them the best of luck.

The record shows that this Government’s long-term economic plan is working in the face of a difficult global economy. This Budget focuses on investment, and I shall be happy to support it tonight.

Several hon. Members rose