Finance (No. 2) Bill

As the astute observer may have noticed by now, the Bill is a largely inherited set of technical measures, with the general election having interrupted the conventional timetable and truncated the previous Administration's Bill, which would have introduced many of the same provisions. No matter; we have had a successful and thorough debate. The hon. Member for Bristol West (Stephen Williams) noted, I think sarcastically, that he was looking forward to the fun and delights of Committee, but we have covered the Bill's territory well. I pay tribute to the hon. Member for Skipton and Ripon (Julian Smith) for his very good-quality maiden speech. He made the case for the small business community in his constituency strongly and passionately. It is a fine and beautiful constituency, and I was born near or within it at Airedale hospital, so it has a special place in my heart for that reason if for no other. The hon. Member for North East Somerset (Jacob Rees-Mogg), who is no longer in his place, made a series of interesting observations about long cigarettes, the weight of aircraft and the creeping Europeanisation of the world in general, and I look forward to his pearls of wisdom in Committee. The hon. Member for Watford (Richard Harrington) rightly noted the measures in clause 14 on film tax credit arrangements, and the hon. Member for Portsmouth North (Penny Mordaunt) talked eloquently about the important changes in clause 31 affecting asbestos compensation settlements. I agreed very much with the hon. Member for Devizes (Claire Perry)—that may come as a shock to her—about the provisions for shared lives carers. Being a carer is a big commitment and requires a lot of patience, understanding and hard work, but it offers adults who need support owing to their health or disability a valuable opportunity to live with people who can give them the help that they need, share their hobbies and interests and so on. We, too, therefore welcome the simplification of the tax treatment of foster carers and shared lives carers so that their costs and expenses are recognised more fairly in the tax system. The hon. Member for Portsmouth North mentioned the clauses on penalties for failures to make tax returns and pay taxes. We clearly need a regime that is tough on evasion and that incentivises prompt payment, but we also need to ensure fairness in the system so that entirely innocent people and companies are not caught in an unfair penalty cycle. As the Institute of Chartered Accountants has noted, we need to ensure that we monitor that regime carefully, especially for very small businesses that do not necessarily have in-house accountants or bookkeepers. A number of other measures were mentioned in the debate. The hon. Member for Dundee East (Stewart Hosie) talked about the safeguards for investors in venture capital schemes and the insertion in the rules of a financial health requirement, to prevent tax reliefs from falling into ““firms in difficulty””. That raises a number of questions that we will want to explore further in Committee. The hon. Member for Macclesfield (David Rutley) rightly highlighted the clause about the deduction of income tax at source. It is a positive thing that there will be a new online mechanism for customers to lodge the fact that they are returning their income tax deductions, but that prompts the question how HMRC enables access for customers through downloadable information and whether customers can identify their tax office correctly. Again, we will want to pursue those points in Committee. Very few Members noted the Bill's provisions on the automatic enrolment of employees in pension schemes from 2012, which are technical measures to facilitate the new pension scheme arrangements. That national employment savings trust is incredibly important—something that the previous Government rightly put in place for all workers between the age of 22 and retirement age earning more than £5,000 a year, unless they were already in a pension scheme. I particularly want to press the Minister on that matter, because I understand that the consultation process said that by 30 September we would know the Government's views on that automatic enrolment arrangement. We have passed that point, and I do not think that we have had any information on the issue. It is a curious and fragmented process that we have entered into with this chopping and changing between Finance Bills. The cynic in me detects the possibility of some highly tactical games being played by Treasury Ministers. Perhaps I am wrong, but their approach to finance legislation, as my hon. Friend the Member for Wallasey (Ms Eagle) suggested earlier, seemed to create a toxic, bad Bill—perhaps the one that was pushed through before the summer recess, possibly without the Liberal Democrats quite noticing how bad it was. Other toxic, bad Bills are to come in due course, such as those on scrapping the health in pregnancy grant, the savings gateway and the child trust fund arrangements. It is interesting to see how Ministers are packaging up these measures. Machiavelli may have some observations on that particular tactical game. As my hon. Friend also mentioned in her opening speech, a number of measures are conspicuous by their absence from the Bill. My hon. Friends the Members for Edinburgh East (Sheila Gilmore) and for Islwyn (Chris Evans) mentioned the video games tax relief arrangements for that particular industry, which many firms in my Nottingham constituency have also been urging and expecting. They were disappointed when the Government withdrew them. My hon. Friend the Member for Bassetlaw (John Mann) referred to the investment allowances to help businesses to grow and ensure that they invest in plant, infrastructure and capacity to enable them to prosper. I might have disagreed with him slightly in his comments on VAT, but he made a number of points that are worth deeper thought and observation. The context of the Bill says everything. Although the measure is wide ranging, it is absolutely a missed opportunity—perhaps the calm before the storm of the spending review. We know that many failings arise from the legislation, basically because of those aspects that are not in it. Insufficient steps are being taken to clamp down on tax evasion, and serious doubts are now growing, as my hon. Friend the Member for Wirral South (Alison McGovern) mentioned, about the capabilities of a depleted HMRC, should its budget be unfairly constrained. The Bill is particularly a missed opportunity for legislation to promote growth and generate revenues, and that is what it will be remembered for. We should look at the growth deniers on the other side of the House. My hon. Friends the Members for Scunthorpe (Nic Dakin), for Sefton Central (Bill Esterson) and for Islwyn all mentioned TINA—there is no alternative, as the former Prime Minister, Lady Thatcher, described it—and that notion has infected those on the Government Benches. They are doing a good job in sticking to their message and trying to ram their points home, but it is becoming a little obvious that the script is getting somewhat old. I was impressed in particular by the comments of the hon. Member for Boston and Skegness (Mark Simmonds)—the ideology that he has formulated of the expansionary fiscal consolidation strategy and the theory that he has announced that cuts can stimulate economic activity. His comments were mirrored to a certain extent by those of the hon. Member for Mid Norfolk (George Freeman). We need to hear much more from the hon. Member for Boston and Skegness on that strategy. It is clear to me that the Conservative party is focusing its energies exclusively on this ideological crusade in cutting investment, rather than looking equally at the other side of the balance sheet—rebuilding revenues—which surely must be attended to. Everybody knows that the deficit position was largely caused by reduced revenues following the credit crunch and the banking crisis, and growth is the best antidote to that. It is quite clear also that the Government see public services and economic regeneration as somehow negative aspects—a glass half empty—whereas Labour Members see growth, public services and investment in infrastructure as a glass half full and an opportunity to expand. Through that virtuous cycle, we will repair the public sector balance sheet. My hon. Friend the Member for Edinburgh East asked whether we wanted to burden future generations with a legacy of high unemployment and low growth, and that is absolutely the right question to pose to Government Members. It is important to look at the wider context in which the Bill was presented, but we can already see, as the news develops, that growth is fragile and that confidence is wobbling. I think that my hon. Friend the Member for Wallasey mentioned a report in The Times that showed that finance directors' confidence is at its lowest level in 18 months, and 34% of those surveyed in a Deloitte poll said that they expected the economy to go into reverse. We sincerely hope that that does not happen. The hon. Member for Dover (Charlie Elphicke) said that confidence is a critical ingredient that plays a massive role in the economy, and it is a great shame that we can already see the steps taken by the Government eroding some of that confidence. That has its roots in the decisions made in the Budget before the recess. The downgrading by the Office for Budget Responsibility of the forecast for 2011 from 2.6 to 2.3% suggests a £5 billion loss in receipts because of the smothering of economic activity. That is compounded by the many anti-growth policies pursued, and messages given, by the Government parties. Tonight, hon. Members have talked about regional development agencies being scrapped and the Sheffield Forgemasters loan not being granted. There are a number of ways in which the economy is at risk. It is important that, throughout the passage of the Bill, we explore the Government's strategy and what more can be done to ensure that we pursue a pro-growth strategy. We might not divide the House tonight, but we put the Government on notice that we expect and need stronger pro-growth measures and legislation in future. We will scrutinise the detail of the Bill closely in Committee. I look forward to hearing what the Minister has to say.