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UK PARLIAMENT · SITTING

Catherine McKinnell

MP for Newcastle upon Tyne North · Labour · United Kingdom

IN THEIR OWN WORDS

The family of a terminally ill constituent contacted me in desperation last month after trying to resolve the pension issues of their family member since January. She died yesterday, with her pension still unresolved. Can the Minister be more specific for that family about what will be done to resolve this issue?

CIVIL SERVICE PENSIONS · 2026-07-06 · READ IN HANSARD

As the UK trade envoy to Italy, I thank the Secretary of State for confirming the GCAP funding in his statement. As MP for Newcastle upon Tyne North, I add my voice to those who want to see this as an opportunity to genuinely spread investment and opportunity that will build strength and resilience in our people right across the UK—they a…

DEFENCE INVESTMENT PLAN · 2026-06-30 · READ IN HANSARD

This report is welcome, but that does not make its existence any less tragic. Far too many mothers and babies have been failed, including mothers like my constituent Amie, who late last year was turned away repeatedly, despite reporting reduced movements. Her baby Seren was born stillborn.

NATIONAL MATERNITY AND NEONATAL INVESTIGATION · 2026-06-30 · READ IN HANSARD

Failures to address these issues have significant effects, both on the public finances and on the most vulnerable people in society, and, indeed, they are issues that are often reflected in our constituency mailboxes. I was contacted recently by a young woman who had reported child sexual abuse to the police last year.

HOME OFFICE AND MINISTRY OF JUSTICE · 2026-06-29 · READ IN HANSARD

Her husband was the victim of an assault by the defendant, who had raped his wife. They were forced to wait four hours for the trial to begin. They were eventually told that the defendant would arrive and that the delay to his delivery was causing the delay, but it had a knock-on effect on additional days in court.

HOME OFFICE AND MINISTRY OF JUSTICE · 2026-06-29 · READ IN HANSARD

Friend has said, we need a court estate that is fit for purpose in order to maximise the use of these additional days. I too have visited my local court, in this instance Newcastle Crown court.

HOME OFFICE AND MINISTRY OF JUSTICE · 2026-06-29 · READ IN HANSARD

The complete record

Every one of 4,961 lines we hold for Catherine McKinnell, in date order, each linked to its source. Free to read, in full, without an account. Page 71 of 100.

  1. [ Interruption. ] The Minister says she has said it, so will she give a cast-iron guarantee today that they will be in receipt of these payments by 2016? Will she confirm that at the Dispatch Box? No.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  2. How exactly do the Government intend to pay for this increase in support? There is another key concern. We now know that the universal credit programme is in complete disarray under the Secretary of State for Work and Pensions, and the Treasury is refusing to sign off on the programme’s business case, and there are concerns that low-income parents may now be waiting until 2017 at the earliest to receive this welcome additional support. Again, I have tabled a number of written parliamentary questions to ascertain whether this will be the case, and, again, disappointingly but perhaps not surprisingly, the Minister has failed to answer any of these questions. I put it to the Minister today: when can the 4 million low-income families who will be eligible for universal credit expect to receive support to cover 85% of their child care costs?

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  3. As Alan Milburn, chairman of the Government’s Social Mobility and Child Poverty Commission, has made absolutely clear, low-income families could still lose out despite the increase in support for those most in need. He told The Independent on Sunday : “The Government has taken half a step forward. The announcement that 85 per cent of childcare costs will be met under universal credit from 2016 will help work pay for low-income families. This is very welcome. The sting in the tail is that this £200m expansion in childcare support will come from within the universal credit programme. This risks robbing Peter to pay Paul.” The Minister did not provide any clarity when my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) probed earlier in relation to this, but there needs to be some upfront response.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  4. I would also like to take this opportunity to probe the Minister on the Government’s plans to support 85% of child care costs for all universal credit claimants. Under the Government’s original plans, only those universal credit claimants who paid income tax—the highest earning claimants—would be eligible for 85% of support. Everybody else would be covered for only 70% of costs. We welcomed these changes as they signified a reversal of the Government’s decision to cut the child care element of working tax credit from 80% to 70% in 2011, a move that we opposed because we recognised that it simply served to hit those parents who needed the support the most. But it would seem that this could be yet another example of the coalition Government giving with one hand and taking away with the other.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  5. That stands in complete contrast to the claims of Ministers who have implied that working parents are all in for a £2,000 child care subsidy. Indeed, the Financial Secretary’s own website, summarising her week of activities when she announced this revised child care scheme in March this year, suggested this was the case. She said: “The new Tax-Free Childcare scheme which I am guiding through Parliament will provide 20 per cent support on childcare costs up to £10,000 per year for each child via a new simple online system. This will mean an average saving of £2,000 a year per child.” I hope that she will set the record straight on that point, because her Department’s own impact assessment suggests a very different reality.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  6. He said: “About 80 per cent of the gains from this will flow upwards to those in the top half of the income distribution.” Throughout the Bill’s passage in the House, we will continue to press for some clear, transparent information from Ministers so that parents can be clear about what they can and cannot expect to receive in support. At the moment, the Bill is completely devoid of any of this information. None the less, despite a lack of answers from the Minister, there is a curious line in the Bill’s impact assessment, which states that, of those families that the Government say will gain as a result of the new scheme, “the average additional support they will receive is £600 per year”— £600 per year on average.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  7. My hon. Friend raises an important point and puts forward compelling evidence as to why we need to question the details on this. [ Interruption. ] The Minister says that it is not true, but if it is not true, why is she not forthcoming with the Treasury data on this issue? As Gavin Kelly, chief executive of the Resolution Foundation, pointed out, the Government’s decision to increase the spending cap is likely to benefit those on the highest incomes, despite the fact that it is low and middle-income families who are struggling the most with the rising costs of child care, for whom it is acting as a barrier to taking on more work.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  8. If that decision is taken, does the Minister plan to renegotiate, or at least revisit, NS&I’s contract with Atos to ascertain whether the company is up to delivering and maintaining accounts to potentially 2 million parents, considering that this would be significantly different from NS&I’s current activities?

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  9. Will the Minister tell us why the Government commissioned a £38,000 cost-benefit analysis report by Economic Insight, which recommended an open, competitive market model for delivering child care accounts, and then simply ignored the report’s recommendations and chose an in-house provider, NS&I, instead? Will she clarify who will be delivering the child care accounts under this in-house option, as it is my understanding that the former Economic Secretary to the Treasury, now Secretary of State for Culture, Media and Sport, awarded a seven-year outsourcing contract to Atos in May 2013 to deliver all customer-facing and back-office services to about 25 million NS&I customers? If the Government continue with the previous plan to have NS&I deliver child care accounts, will the Minister clarify whether it will in fact be Atos delivering them?

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  10. Thank you, Madam Deputy Speaker. I am grateful for your guidance. The final point I want to make concerns the delivery of this scheme. We are now some 14 to 16 months away from when the scheme should be up and running, according to the Government’s revised timetable, yet the Government still have not made a decision—at least publicly—about who will deliver the child care accounts through which parents will access Government top-ups and pay for child care. They originally announced in their consultation response that National Savings & Investments would be their delivery partner, but after ditching that decision and the preceding consultation process, they have backtracked and reopened the consultation process.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  11. Regardless of what working parents of three and four-years-olds choose to spend on child care, they will be entitled to 25 hours a week for 38 weeks of the year. We know that having school-age children can be a logistical nightmare for many parents, and that too many of them find it increasingly difficult to find after-school and before-school child care. According to a Department for Education survey last year, 62% of parents of school-age children said that they needed some form of before-and-after school care or holiday care to combine family and work, but of these, nearly three out of 10 of them were unable to find it. That is why Labour will introduce a primary child care guarantee to benefit parents of primary age children, because that is when families most require child care support.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  12. We have said that we will build on previous efforts and extend free child care for three and four-year-olds from 15 to 25 hours a week for working parents. We will give parents peace of mind by setting down in law a guarantee that they can access wrap-around child care—from 8 am to 6 pm— through their local school, if and when they want it. As with the 15-hour early years entitlement, introduced under the previous Labour Government, the new 25-hour offer would be for 38 weeks of the year, which would mean more than £1,500 of extra support per child per year. It would not demand that working parents spend more and more of their own money on child care in order to receive some cash back from the Government, as this Bill will demand of them.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  13. The Government need to reassure us over NS&I’s ability to provide this contract and to tell us whether services will be provided by Atos, especially as Atos’s delivery of universal credit and personal independence payments has been such a shambles. With just a year to go, it is important that Ministers get a grip and make some decisions. As with universal credit, any further delays in implementation will only hurt hard-pressed families who are already struggling with the cost of child care bills. Let me turn briefly to our proposals for investing in child care which, on top of what the Government are providing today, would deliver a real difference to hard-pressed families who are struggling with the child care crunch.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  14. Critically, this Bill falls far short of what is needed to make up for the last four years of spiralling costs, falling child care places and cuts to vital support for families. Parents deserve better than that, which is why the next Labour Government will extend free child care for all three and four-year-olds as well as introducing a primary child care guarantee to give parents peace of mind.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  15. Most stay-at-home mums, as well as working parents, have already said that child care costs are the biggest barriers to their either going back to work or increasing their hours. Working parents and families need help now, not in 14 months’ time. But equally importantly, Ministers need to come clean over who will benefit from this scheme and by how much, so that parents can make an informed decision about which form of support will be most appropriate for them. We will support the Bill’s Second Reading as we welcome the additional support for families because we know how much they are struggling, but we will scrutinise every detail to get the answers to the questions that we put today, as there are many areas in which the Government are not being up front.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  16. I will not give way, as I must make progress. In conclusion, while we welcome any extra investment in child care, the Bill does not make up for how much more families are paying for child care under this Tory-led Government, and it confirms that no help will arrive for parents facing a child care crunch for at least another 14 months. Families have already seen their child care costs rise five times faster than pay. Many already spend more on their child care than on their mortgage. Parents have seen the number of child care places fall by the thousands, and, despite the Prime Minister’s promises to the contrary, too many communities have seen their local Sure Start children’s centres close.

    CHILDCARE PAYMENTS BILL · 2014-07-14 · READ IN HANSARD

  17. We recognised the value of this important allowance to companies up and down the country in supporting them to invest for the long term, and in helping them to create and safeguard jobs. That is why Labour took the decision to double it as part of a series of measures announced in the March 2010 Budget—in order to “support start-ups and small and medium sized enterprises…to position the UK as a leading centre for research and innovation, and to ensure that the UK is equipped with skills for growth and the infrastructure it needs to be successful in a low-carbon economy.” The March 2010 Red Book stated: “In order to provide further cash flow support and an incentive to increase business investment, the Government will increase the threshold of the AIA to £100,000 for expenditure incurred from April 2010.” That announcement was hugely welcome to businesses up and down the country.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  18. Members of the background to this important issue. The annual investment allowance was announced as part of the 2007 Budget by the former Chancellor of the Exchequer, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown). It was introduced as part of a package of reforms to enhance Britain’s international competitiveness, encourage investment and promote innovation and growth. The new allowance replaced first-year capital allowances and meant that from April 2008, under the Labour Government, businesses were able to offset up to 100% of expenditure on general plant and machinery in any given year against taxable profits, up to a limit of £50,000.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  19. I beg to move, That the clause be read a Second time. New clause 10 takes us back to 2010 and the heady first few months of this Government. It takes us back to a time when the coalition, having inherited a growing economy from the Labour Government, choked that recovery off by adopting an anti-growth, short-termist, short-sighted approach to supporting business and jobs. As hon. Members will be aware, one of the Chancellor’s first moves in government was to announce in the June 2010 Budget that he was cutting Labour’s annual investment allowance. The new clause asks the Government to undertake a proper review of the impact on business investment of that terrible decision. We need to learn the lessons from that dreadful mistake. Before we consider the new clause in more detail I want to remind hon.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  20. We are still at 2010; we will get to the present day in due course, but the hon. Gentleman seems to miss the point somewhat. Obviously, the Conservative party would like to airbrush out the unpleasant blip in 2010, when it almost abolished the investment allowance, and all the impacts that flowed from that, which were evident from the fall in business investment. That is the point that our new clause reinforces. The decision taken at that time was terrible. I do not know what the thinking was behind it—whether it had been planned for a long time by the Conservatives while they were in opposition, or whether it was simply a case of spitefully thinking, “It’s a Labour policy, so we will reverse it”—but it had catastrophic implications. As the hon. Gentleman’s question indicates, they had to think again.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  21. We can only speculate on what on earth was going through the Chancellor’s mind when he slashed an incentive that was clearly supporting those businesses in the very manufacturing industries that he claims to champion in making long-term investments, and creating and safeguarding the jobs that we need so desperately.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  22. Once again, Conservative Members, and indeed the Minister, want to brush over this inconvenient part of their so-called plan. They clearly made a bad decision in 2010. The purpose of the new clause is to show that. If the reduction in the annual investment allowance was offset by the reduction in corporation tax, as the Minister argues, why did they revisit the decision and increase the allowance again? That would not have been necessary if their only plan for supporting business up and down the country, which was to reduce corporation tax, had been successful. We supported that plan, but it was not enough on its own to offset the damaging uncertainty created by slashing the annual investment allowance from £100,000 to £25,000 in one fell swoop.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  23. My hon. Friend makes a fair point: that is not what we are discussing. However, I am interested to know whether the hon. Gentleman will rule out slashing the annual investment allowance with no notice if the Conservatives are re-elected in 2015. Will he confirm that—yes or no?

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  24. The hon. Gentleman is obviously not able to rule in or rule out any slashing of the annual investment allowance, but we have had so much chopping and changing that there is major uncertainty over whether the Chancellor and other Conservative Ministers have a sensible approach to investment. It is as though they do not understand that chopping and changing—slashing the annual investment allowance from £100,000 to £25,000 and then increasing it again—is the worst approach if we are trying to encourage business investment in this country. That is the kind of uncertainty that we have seen under this Government. Although the hon. Gentleman cannot rule anything in or out, I am interested to hear whether the Minister will rule out any further chopping or changing on this policy.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  25. In chopping and changing this policy, the Government have undermined the certainty that is needed to give businesses the confidence to invest for the future.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  26. We have had these debates many times. We have supported the reductions in the corporation tax rate as part of a package of measures to support investment, jobs and growth. Unfortunately, the Government thought that corporation tax rates would do the job on their own. That is why they decided to slash the investment allowance, and to put all their eggs in one basket—the corporation tax basket. We have made it clear that we support a competitive rate within the G7 and the current rate, in order to provide the competitiveness that will create jobs and growth. The hon. Member for Burnley (Gordon Birtwistle) is right that that has to be part of a package of measures. One key issue that businesses always raise is certainty.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  27. That is very much the point that I was making and that we have made all along. We had a financial crisis in 2008, and the Labour Government did everything that could be done in those difficult times to support businesses in order to maintain investment levels, safeguard jobs and lay the foundations for the jobs of the future. That is why Labour decided to bring in the investment allowance, and then to double it in the Budget in March 2010. We knew that businesses needed certainty at that difficult time in the economic cycle to make investment decisions. That proved successful. The U-turn by this Government was not quick enough. We called for it in every Finance Bill. Their eventual U-turn proved that the annual investment allowance was a successful policy, because they recognised that it needed to be reinstated.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  28. I will give way again, but I hope that it is in order for the Minister to confirm that the Tory party will rule out any further chopping and changing on the annual investment allowance.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  29. Thank you, Madam Deputy Speaker, for your sage guidance. I agree that the Minister appears to be diverting the discussion away from the issue of concern: the Government’s approach to the annual investment allowance, which is the subject of the new clause. It calls for a review of the impact of the Government’s decisions on the allowance. He seems very reluctant to address that issue.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  30. My hon. Friend raises an important point, and that is the first time we have heard a Government Minister confirm that this is a temporary measure. I think that reinforces the argument in the new clause, which is that we should analyse the impact of the various changes to the AIA, year on year—it has gone up, down and all around—on businesses and their investment decisions. Hopefully, that will inform any decisions on the allowance, whether by a future Conservative Government or, as is more likely, a future Labour Government.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  31. ] I see Government Members rolling their eyes, but unfortunately they need to face the truth.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  32. What happened to business investment between the June 2010 Budget and the 2012 autumn statement that drove the Chancellor to move from feeling perfectly comfortable in slashing the annual investment allowance, because more than 95% of businesses would be unaffected, to announcing in 2012 a significant increase in the AIA to £250,000? Let us cast our minds back to what the Chancellor said when he announced that decision in autumn 2012. He said he was increasing the annual investment allowance because: “It is a huge boost to all those who run a business and who aspire to grow, expand and create jobs.” —[ Official Report , 5 December 2012; Vol. 554, c. 881.] What exactly does that say about the Chancellor’s cavalier approach back in 2010? Surely the complete opposite— [ Interruption.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  33. It might be a positive signal for large companies, but not for their suppliers.” In evidence to the Treasury Committee on the June 2010 Budget, John Whiting, then tax policy director at the Chartered Institute of Taxation and now director of the Office of Tax Simplification, expressed his concern that the measure would particularly hit medium-sized firms. The June 2010 Budget cut the annual investment allowance to £25,000 from April 2012 on the grounds that, in the Chancellor’s view, only 5% of firms would be affected. We then had two autumn statements and two Budgets, at which we put these arguments to the Government, before the Chancellor announced in the autumn statement 2012, again to great fanfare, that he would “temporarily” increase the AIA—the one he had just cut to £25,000—to £250,000 from January 2013.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  34. The independent Institute for Fiscal Studies commented that losers from the cut “would be those firms with capital intensive operations—with long lasting equipment and machinery—that currently benefit most from the capital allowances. While this is likely to apply to more firms in the manufacturing and transport sectors, it may also be true for some capital intensive service sector firms.” A senior economist at the manufacturers association, the Engineering Employers Federation, said that financing cuts to corporation tax by “cuts to investment allowances will be a heavy price to pay, especially for smaller companies.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  35. Therefore, in the Chancellor’s terms, only 5% of businesses would have been affected by his decision to slash the allowance. In anyone else’s terms, however, that is somewhere between 100,000 and 200,000 firms. That is a significant number of businesses that are employing—or potentially employing—a significant number of people, while also indirectly supporting employment through their supply chains. That seems to ring true of the Government’s approach because when they speak about being pro-business, they seem to forget the many businesses out there that do not fit the Tory vision of what businesses are, and it seems that those 100,000 or 200,000 firms did not feature on the Chancellor’s radar. Let us remind ourselves briefly of some of the views expressed at the time about the decision the Chancellor took.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  36. He sought to reassure us that the impact of that reduction from £100,000 to £25,000 would be limited because: “Over 95% of businesses will continue to have all their qualifying plant and machinery expenditure fully covered by this relief.” —[ Official Report , 22 June 2010; Vol. 512, c. 175.] In other words, the Chancellor believed in June 2010 that only 5% of firms were receiving any benefit from the annual investment allowance. HMRC’s tax information note at the time stated: “Over 95 per cent of businesses are expected to be unaffected as any qualifying capital expenditure will be fully covered by the new level of AIA (£25,000).” It went on to clarify that “between 100,000 and 200,000 businesses will have annual capital expenditure of over £25,000”.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  37. Returning to the history of the investment allowance, the previous Labour Government doubled it, recognising its importance to giving businesses confidence to invest for the future, and to be supported within the tax system to make such decisions. What happened after it was doubled? We know that, in his infinite wisdom, the Chancellor decided as part of his emergency Budget—or so he called it—in June 2010, to announce to great fanfare that the annual investment allowance would be cut. However, it would not just be cut. At a time when the economy was growing after the financial crisis, the Chancellor decided that the best way to secure the recovery and back British businesses and jobs was to slash the annual investment allowance to just £25,000 from April 2012, as in the Finance Act 2011.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  38. Well, it simply reinforces the impression—in fact, the reality—that the Government are perfectly well disposed to chopping and changing their policy and approach to the annual investment allowance. That is the point we are trying to make, and the point behind the new clause. The Government should stop and take a look. I have heard from businesses that they would rather have no investment allowance than have chopping and changing of the AIA, because that can be destabilising for investment decisions. They would rather have a more stable approach to policy making than that being displayed by the Government.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  39. It is a little desperate to try to justify what is proven to have been a flawed decision-making process back in 2010. By the Chancellor’s own accounts, the measure was a huge blow to all those businesses that aspire to grow, invest for the long term and create jobs.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  40. Slashing the allowance from £100,000 to £25,000 and then announcing that they would temporarily increase it to £250,000, all in the space of just two and a half years, does not, and did not, inspire confidence in the Government’s long-term approach and strategy for supporting growth and investment.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  41. As ever, my hon. Friend makes an insightful intervention and raises the key question. The Government need to take a step back and look at the impact their decision-making is having on businesses and their ability to make the long-term decisions necessary to secure the jobs, economic growth and the rebalancing of the economy that we all wish to see. The Chancellor and his Treasury Ministers cannot have it both ways: either the annual investment allowance supports growth and the creation of jobs or it does not. Labour welcomed the decision to increase the allowance from January 2013 to £250,000, because we know it is important to support business growth and to foster long-term investment. However, we are concerned—this is why we have tabled new clause 10—about the Chancellor’s erratic and, frankly, bizarre approach to this important issue.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  42. We had been through a global financial crisis and we knew that many businesses would be very uneasy about making the sort of long-term financial investments, on which they would not see a return immediately, that are necessary to create jobs. The intention of introducing and doubling the allowance in 2010 was to give businesses the confidence to invest. We know that it was welcomed by business at the time and we know that this Government’s decision to slash it to £25,000 was abhorrent to many businesses, particularly in the manufacturing sector. They needed the support and confidence to make the investments that we need to start seeing the benefits of now.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  43. I know the hon. Gentleman’s interest in this issue is sincere. The Treasury may or may not have been right in its assessment that only 5% of businesses would be affected, but that is still 100,000 to 200,000 businesses—not to mention the supply chain. The new clause seeks an assessment of the impact of the decision taken at the time. How much of an impact did it have? The hon. Gentleman says that, as we come out of recession, some businesses will be making more profit and will therefore be able to make more use of the annual investment allowance. That was exactly the point of bringing in the allowance in 2010.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  44. and right hon. Members to back new clause 10 this afternoon, to ensure that the Government understand the impact of the Chancellor’s dreadful decision making back in 2010, and that they do not make the same mistakes ever again.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  45. Friend the shadow Chancellor made an important speech about Labour’s approach to developing a business tax system that promotes long-term investment, supports enterprise and innovation and, most importantly, provides a stable and predictable policy framework for business, which is founded on fairness. Yesterday, my right hon. Friend, the Leader of the Opposition set out how a future Labour Government will mend Britain’s fractured economy and develop a genuinely long-term approach to backing growth in every part of this country to ensure rising prosperity for all. It is this long-term approach to growth and backing Britain’s business and jobs that has been so lacking from this Government, and nothing illustrates it better than their shambolic and chaotic approach to the annual investment allowance since 2010. For that reason, I urge hon.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  46. How many jobs could have been created during the last three years of flatlining growth while we have undergone the slowest recovery for 100 years? How many households could have been better off as a consequence, but will find themselves worse off in 2015 than they were back in 2010? Let us not forget that in 2010, back when the Chancellor was slashing the annual investment allowance, he said that the economy would have grown by 9.25% by now. Instead, it has grown by just 4.6%—far slower than in the United States or Germany. Indeed, GDP growth this year is still expected to be lower than the Office for Budget Responsibility forecast in 2010. On Monday, my right hon.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  47. They need long-term stability and predictability to give them the confidence to invest, to make plans for the future and to take on more staff. What they have got from this Government, however, is a continual chopping and changing, with U-turn after U-turn and what seems to be a complete lack of strategic thinking. What we need to hear from the Minister today is confirmation that the Treasury and his Government have taken seriously the impact of their decisions on business confidence, investment and jobs. We need to know that they have learned from the Chancellor’s mistake back in 2010, and that they will properly review its impact to ensure that the same mistake is not made again. What assessment has the Minister made of the number of businesses that were not able to grow after the annual investment allowance was slashed?

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  48. That is why we have announced a further reduction in the main rate of corporation tax, as we discussed earlier, from April 2015 and is also why the current 10-fold increase in the maximum annual investment allowance is time limited rather than permanent.” –– [ Official Report, Finance Public Bill Committee, 16 May 2013; c. 145.] A matter of months later, at Budget 2014, the Chancellor decided to about-turn once again, and extended and temporarily increased the annual investment allowance further—before, presumably, he intended it to return to £25,000 from 1 January 2016. As the Chartered Institute of Taxation put it so well, the one thing businesses need most, particularly in challenging economic times, is certainty.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  49. Member for Bromsgrove (Sajid Javid), explained why the increase in the allowance to £250,000 from January 2013 would be a temporary measure only. He said: “We recognise that the change follows quite soon after the decrease in the annual investment allowance to £25,000 that was announced in the June 2010 Budget and implemented in the Finance Act 2011, which took effect from April 2012. The Government’s central position has not changed and remains that, in general, a lower corporation tax rate with fewer reliefs and fewer allowances will provide the best incentives for business investment, with the fewest possible distortions.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD

  50. Indeed, as the Association of Taxation Technicians neatly put it at the time, “the chopping and changing of capital allowances will lead to error, confusion and higher professional costs for small businesses.” The Opposition also welcomed the Chancellor’s announcement in Budget 2014 to extend the period of the temporary increase to 31 December 2015, with the allowance being temporarily increased again to £500,000 from April 2014. The straight fact, however, is that the Chancellor and his Government have tied themselves in knots over this vital issue. Just last year, when we considered in Committee what is now the Finance Act 2013, the then Economic Secretary to the Treasury, the Secretary of State for Culture, Media and Sport, the right hon.

    FINANCE BILL · 2014-07-02 · READ IN HANSARD