Finance Bill

Part of the debate – in the House of Commons at 8:42 pm on 27th April 2020.

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Photo of Miriam Cates Miriam Cates Conservative, Penistone and Stocksbridge 8:42 pm, 27th April 2020

May I refer the House to my entry in the Register of Members’ Financial Interests?

The context of this debate is substantially different from that surrounding the Budget statement on 11 March. We are now facing significant economic challenges and we do not yet know the full financial impact of covid-19, but the reasons for introducing the measures in the Bill have not changed. We must make Britain the best place in the world to set up and run a business and we must level up our economy with more innovation outside London and the south-east to grow high-skilled, well-paid jobs in areas that have been left behind.

It has been wonderful to see the outpouring of gratitude across the nation to our NHS and care workers, who are on the frontline of the battle against covid-19. It is absolutely right that we recognise their bravery and dedication and the key part that they are playing in keeping us safe. But I also want to pay tribute to the millions of businesses in this country whose hard work and innovation have generated the tax revenue that funds the NHS as well as our schools, our roads and our railways.

The risks of setting up and running a business are considerable. Indeed, many fail. Many small business owners are now facing the toughest financial challenge of their lives. The coronavirus small business grant scheme, business rate holidays and loans, including the bounce-back loans announced today, have been a lifeline to these companies, but some still will not make it through this crisis and many lifetimes of hard work and investment, and jobs, will be lost.

When we emerge from this pandemic, we need our businesses to recover, to grow and to be profitable. That is the only way in which we will be able to continue to afford to invest in our NHS and public services, but we also need our businesses to innovate, to increase our productivity and to build on the UK’s reputation as a leader in science and technology, so I welcome the plans to increase spending on research and development to £22 million a year and the £200 million boost to our life sciences industry. Right now, we are seeing the immediate importance of research and development with the ongoing search for an effective coronavirus vaccine. The UK’s scientific community has already made important breakthroughs, including introducing a new swab test to overcome global reagent shortages, but it is important to remember that research and development does not only take place in our universities. Businesses up and down the UK are creating new technologies and making scientific advances that benefit all of us. The nature of R&D, as we can see from the vaccine trials, is that we cannot tell when a breakthrough will come. This presents a significant risk to businesses, which continue to pay their staff and fixed costs, whether or not the breakthrough has been made.

The increase in R&D tax credits in the Bill is an enormous boost to businesses in this position and will give them the confidence to continue to innovate and invest in new technologies. I know at first hand how vital this is from the small software company that I own with my husband. As we have worked to deliver technical advances, we have had some years when R&D credits have made the difference between staying in business and not.

Since 2010, British businesses have created over 3 million jobs, although, undoubtedly, employment levels have been negatively affected by coronavirus. But as we emerge from covid-19, we must make sure that we are creating productive jobs—skilled jobs—by capitalising on the knowledge and talent of our scientific and technical communities. Support for R&D will help our growing tech sector to continue to lead the world and to create the kind of well-paid jobs that present real opportunity to our young people.

We must also make sure that growth and innovation are spread equally across the country. As my right hon. Friend the Prime Minister has said, talent is spread evenly across this country, but opportunity is not. In my constituency of Penistone and Stocksbridge, there is a lack of skilled, well-paid jobs and too many young people are forced to leave the area to seek opportunities. This Government’s plan for infrastructure investment, a towns fund and investment in further education will help to rebalance our economy and make sure that skilled jobs can be created across the UK. In the past, manufacturing in the north of England was the powerhouse of the UK economy. Every manufacturing process, cottage industry and new factory was born of innovation and risk. In the north, we need a revival of this drive to start new, innovative businesses, and the measures in the Bill—particularly the support for research and development—will be crucial to our economic recovery.