Victoria Atkins
MP for Louth and Horncastle · Conservative · United Kingdom
“Oh dear. This may be the last time the Secretary of State gets to give such an inadequate answer to what is a reasonable question about her grip on her Department. But let us look at Labour’s wider chaos.”
“In recent weeks, DEFRA’s quangos have made headlines: the Environment Agency is failing to prosecute waste criminals, instead going after virtuous volunteers who are cleaning up the rivers for it; Natural England is demanding more madcap fish schemes at Hinkley Point C, on top of its recommended £700 million fish disco policy, all of whic…”
“There are many questions still left unanswered in this report, and I hope that the Secretary of State will try to answer them rather than deflect, because that has been noticed. The plan looks to double the funding for Environment Agency inspections. Why are this Government focusing on bureaucracy rather than helping farmers survive?”
“In another leap from reality, the Government’s negotiations with the EU get barely a mention in this document, despite the enormous consequences they will have for farming businesses. CropLife UK has estimated that this EU reset could drain £810 million from UK farms and sacrifice almost 9,000 jobs from our rural constituencies.”
“We Conservatives view DEFRA as a vital economic Department, so we agree with its efforts to recalculate farming and food producers’ contributions to the economy. By the way, I note that Reform calls itself the farmer’s friend, yet there is not a single Reform MP in the Chamber.”
“As Labour MPs and Ministers in the Department for Environment, Food and Rural Affairs voted repeatedly for the family farm and family business taxes, DEFRA Ministers shut down farming payments without notice, including the SFI. Sadly, the record of this Government is rising food prices and a record number of farms closing.”
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“I welcome my hon. Friend’s strong support for his local economy and the small businesses that play such a vital part in his constituency. The VAT registration threshold, at £85,000, is more than twice as high as the EU and OECD averages, which keeps 3.2 million small businesses out of VAT—the majority of businesses in this country. I hope my hon. Friend will welcome the fact that since the start of the pandemic more than £35 billion has been provided to the tourism, leisure and hospitality sectors in grants, loans and tax breaks. As a Government, we recognise their incredible value and how important they are to the wellbeing of our constituencies.”
“I hope that, in the spirit of Christmas cheer, the hon. Lady will accept that the trade and co-operation agreement is the world’s biggest zero-tariff, zero-quota trade deal. It provides a strong base for UK businesses to trade with the EU. We continue to support businesses trading with the EU, as well as helping them seize new opportunities with fast-growing economies around the world through our free trade agreements.”
“For the majority of businesses trading in Northern Ireland, VAT continues to be accounted for in much the same way as when they trade in the rest of the UK. We are confident that the implementation of the Northern Ireland protocol for VAT mitigates the risk of double taxation in Northern Ireland. We know of one example and HM Revenue and Customs is working with that business to see what more can be done, but I am happy to take up the hon. Gentleman’s question outside the Chamber.”
“My right hon. and learned Friend is one of the people who knows most about corporate criminal liability. I would be happy to take his question away and discuss it with him, because it is critical that the justice system addresses not just individuals who have criminal liability, but companies; indeed, I have prosecuted many companies across a range of offences. We understand that they can commit crimes too, so I am very happy to take his question away.”
“They are relatively easy to collect and hard to avoid, with a collection rate of around 98%, making them a vital and stable source of funding for local services. My hon. Friend the Member for Waveney suggested that the current tax rate discourages investment in new spaces and expansion of existing spaces, but there is little evidence of structural issues in property investment in the UK. As he would expect, we keep a close eye on that. We have the highest share of investment going to non-residential buildings of any member of the G7. We recognise the valuable role that businesses play in our economy and we have taken action to support them through the business rates system.”
“Business rates raise over £20 billion a year in England alone. That money goes to fund vital public services—a priority that the Chancellor emphasised again and again in the autumn statement. Put simply, we do not believe that there is an alternative with widespread support that would raise sufficient revenue to replace business rates. For those reasons, we do not consider there is merit in a radical overhaul or abolition of business rates, but we have delivered meaningful change to improve the system and have continued to conduct several reviews on the issue. Those reviews reaffirmed the importance of business rates and concluded that they have several key advantages over other taxes.”
“I also welcome the opportunity to discuss the substantial reforms to which we have already committed, which will make the business rates system fairer and more responsive to changes in the market. We have heard the concerns expressed about the status quo not just by hon. Members today, but by businesses in previous years. I will address some of those concerns and emphasise our keenness to make changes where appropriate. Forgive me if first I go back to basics. The importance of business rates to public finances is perhaps lost in the understandable concerns raised about the impact on constituency businesses. Taxes on commercial property remain an important part of a fair and balanced business taxation system. Most advanced economies, including most OECD members, have a business property tax.”
“It is a pleasure to serve under your chairmanship, Mr Mundell, and I congratulate my hon. Friend the Member for Waveney (Peter Aldous) on securing this important debate. I am delighted that on our side of the House we have so much of the English coastline represented—I include myself in that, proud as I am to represent the Lincolnshire coastline. I am also delighted to be joined by the hon. Member for Strangford (Jim Shannon). I had many a happy time sailing in the famous Strangford lough in my childhood, and I know how important tourism and hospitality is to his constituency. I thank him for sharing his Northern Irish perspective, as he always does. I hope colleagues are aware that the Government announced a significant support package for business rates in the autumn statement, and I welcome the opportunity to set that out.”
“It may not be the main part of their business—that may be the shop—but, understandably and laudably in the 21st century, they are trying to diversify by having an online business. Nobody could quite see how we could differentiate between the enormous multinationals that we are all keen to ensure pay taxes and those microbusinesses that my hon. Friend the Member for Waveney described so well. That is why in the autumn statement the Chancellor decided against an online sales tax, with the important caveat that the changes we are making to business rates, including with the revaluations, will mean that the distribution warehouses, which supply the multinationals that we are all keen to ensure pay their proper taxes, will see significant rises in their bills while we also protect the shops and microbusinesses to which he referred.”
“This will mean initial bills will reflect changes in market conditions since 2015, and will ensure a fairer distribution of the tax burden between online and physical retail. The hon. Member for Strangford asked me why the Government have not introduced an online sales tax. He will know that we launched a consultation on the issue earlier this year. We received many responses, which will shortly be published, but it is fair to say that there was not unanimity. Indeed, there was not even agreement—I would not put it as highly as that—as to what such a tax should look like, because many of even the smallest businesses on the high streets of our constituencies now have some form of online presence.”
“The Government also provided a £1.5 billion covid additional relief fund for businesses that were affected by the pandemic but which were not eligible for other reliefs. Local authorities, due to their knowledge of their local areas, were responsible for designing and establishing those schemes. Progress has been in line with our expectations, and final distribution data will be published on gov.uk shortly. As the Chancellor stated in the autumn statement last month, it is an important principle that revaluations should reflect market values. Hon. Members have emphasised that point during the debate. The 2023 revaluation will therefore go ahead. From April 2023, all rateable values will be updated for all non-domestic properties, with evidence from April 2021.”
“Since 2017, when the Government doubled the 100% small business rate relief rateable value threshold from £6,000 to £12,000, a third of properties in England have paid no business rates whatever. In my own constituency, I know of many properties in my market towns that pay no business rates precisely because of that protection and they are, I hope, thriving as best they can as a result. The Government provided £16 billion in business rates relief for the retail, hospitality and leisure sectors during the pandemic because it was such a difficult time for them when the economy was essentially closed down. That was an unprecedented level of support for the high street, on which so many communities depend. From my own constituency, I know how vital that support was in keeping businesses’ heads above water during the lockdowns.”
“Goodness me, I would not pretend to have an intimate knowledge of the economics of Torbay. My hon. Friend knows his constituency extremely well, but the realistic fact is that businesses in his high street have to pay taxes of some sort. That is why we have tried to mould the business rate support package to help the businesses that need it the most, which we recognise are those in the retail, hospitality and leisure industry. I will come on to that particular support, which is a very generous package that I hope will be of great benefit to businesses in his constituency. We have a duty to ensure that the business rates system is fair and responsive, while raising sufficient revenue to support the public services that I have already talked about.”
“Friend the Member for Torbay (Kevin Foster) described the vibrant hospitality sector in his constituency. We are extending and increasing the retail, hospitality and leisure relief scheme from 50% to 75%, up to a cash cap of £110,000 per business. Pubs and the holiday parks he referenced are included.”
“In the autumn statement we announced the steps that we will take next year to provide support through these difficult times. We will deliver a business rates support package worth £13.6 billion over the next five years. That will protect businesses from facing large bill increases because of high inflation and rateable value increases following the revaluation. My hon. Friend the Member for Waveney urged the Treasury to cut the UBR to the 1990 level of 35p, showing the trade-offs that the Government must make. Doing so would cost £9 billion a year, which would be a significant potential loss to the public revenue. We have thus taken the steps we have through the support package to protect ratepayers from high inflation, and we are instead freezing the tax rate for three consecutive years at a cost of £14.5 billion. My hon.”
“Of course. I am always delighted to hear from the hon. Gentleman. He will appreciate that there are many other factors; for example, click and collect was a stumbling block for many in the consultation. I look forward to his future correspondence. The support package that we have introduced means that the revaluation will go some way to addressing the imbalance between online and offline retailers. On average, large distribution warehouses will see an increase in bills of about 27%, and bricks and mortar retailers will see decreases of about 20%. We recognise that business rates payers may feel uncertain about the upcoming revaluation, given other pressures the country is facing that are driven by global challenges. Rising prices around the world, made worse by Russia’s illegal invasion of Ukraine, have hit businesses hard.”
“844.] We understand that the issue of business rates cuts across all three of those priorities because of the impact it has on our high streets and the money it raises for our vital public services. As ever, this is about balance. We acted at the autumn statement to support business and we will deliver on the reforms announced at the 2021 business rates review through upcoming legislation. We will continue to listen to the arguments, but we will also continue to make the decisions we think are in the interests of the country as a whole. I thank hon. Members for their contributions and look forward to engaging with them all to ensure that this continues to be a system that serves us all.”
“Member for Ealing North (James Murray) to read; perhaps he has not realised that we have done it—we have committed to several measures to modernise and digitalise the business rates system, including further investment in the Valuation Office Agency to enable it to upgrade its IT infrastructure and digital capabilities. The review recommitted to the digitalising business rates reform programme, which will match business rates data with central HMRC tax data to provide a better oversight of the rates system, more precise targeting of reliefs, and more effective compliance. At the very beginning of the autumn statement, the Chancellor told the House that he had three key priorities: “stability, growth and public services.” —[ Official Report , 17 November 2022; Vol. 722, c.”
“In the longer term, we expect ratepayers to be able to access fuller analysis of the evidence used to set the rateable value of a property, which I hope will in turn restore confidence in that system. We keep all business rates reliefs under review, as the system of reliefs plays a vital role in ensuring the overall sustainability and fairness of tax. The Government ensure that reliefs are as easy as possible for ratepayers to navigate, with several being automatically applied by local authorities, such as transitional relief, supporting small business relief, and empty property relief. Comprehensive guidance on reliefs is available on gov.uk. Through the review—which I encourage the hon.”
“I sympathise with the issues that ratepayers are facing through the “check, challenge, appeal” process. The Government are keen to address those issues by delivering on the commitments made in the business rates review. Accordingly, there is already a plan in place that is providing ratepayers with better access to improved information about how valuations are carried out. I urge my hon. Friend to pass to me any information he or others may have about the unscrupulous agents he described; I am most concerned about that, and will be very interested in that information, because I am looking at the role of agents across all aspects of tax policy. A lot of agents provide a very good service to their customers, but we must weed out those who are unscrupulous or even worse.”
“To enable those reforms, we are also introducing some administrative measures, including a new information duty on ratepayers to ensure the VOA has sufficient data to accurately update rateable values every three years, and to help reduce the number of appeals and the time taken to resolve them. The changes will also unlock opportunities for further improvements to the system in future, such as even more frequent revaluations. We understand the merits of annual revaluations, but we need the change to three years to settle in a little bit, because even moving to three years represents significant operational complexity, but we very much understand the wish for annual revaluations. My hon. Friend the Member for Waveney mentioned the wish for increased transparency by the VOA, which I understand.”
“We understand and listen to the concerns of those running businesses, and keep the operation of all tax policy under review. In the 2021 autumn Budget, we announced the outcome of the business rates review, and will shortly bring forward legislation to deliver those reforms. A core element of that package is more frequent revaluations, moving to revaluations every three years instead of every five; my hon. Friend the Member for Waveney is smiling at me. That represents significant reform, and will ensure that the system is more responsive to changing market conditions.”
“As a proud Member of Parliament for many excellent pubs in my constituency, I understand their concerns. It might help colleagues if I lay out the forms of help that pubs will receive through the support package. As a result of the package of support, pubs’ bills have fallen by about 30%. All pubs will benefit from the multiplier freeze, and pubs with falling rateable values will benefit from the removal of the downward cap that I just described. They will also be eligible for the 75% retail, hospitality and leisure discount. Of course, small pubs that have a rateable value of below £12,000 pay no rates at all. Would my hon. Friend the Member for St Ives (Derek Thomas) be kind enough to write to me about his dry dock example? That business will receive some form of help through the overall package. Let me turn to business rates reforms.”
“We will deliver on a key ask by trade bodies such as the CBI, the Federation of Small Businesses and the British Retail Consortium by permanently removing downward caps from transitional relief, which previously restricted falls in bills. Removing those caps permanently means ratepayers seeing decreases in their rateable value will experience a full drop in their bills next year. Taken together, the revaluation and the support package have updated bills to reflect market conditions. Those facing bill increases will see them phased in through transitional relief, and the small businesses that make up our high streets will be protected through targeted support. The multiplier freeze will protect all ratepayers against double-digit inflation. Colleagues were keen to emphasise the important role that pubs play in our communities.”
“I will come back to that point, and particularly the detail on annual revaluations, because I think there is some sympathy with my hon. Friend’s point of view. The retail, hospitality and leisure relief scheme is the largest business rates one-year relief we have provided in 30 years, so I encourage colleagues to ensure that their local businesses know that the Conservative Government are delivering for those businesses. It will support about 230,000 properties—not just on high streets, but beyond high streets, as my hon. Friend the Member for Torbay emphasised. Therefore, although I understand the point made by my hon. Friend the Member for Waveney regarding the temporary nature of these interventions, permanent changes have been announced and will provide support for affected businesses.”
“Member for Wirral West (Margaret Greenwood) rightly acknowledged that this extraordinary organisation has just been through the worst public health crisis we have ever seen—I think she put it extremely well. I hope that we are all able to discuss this in a measured way that does not need to fall into ideological argument when we acknowledge the impact that that extraordinary event has had on our workforce. Members from across the House referenced the exhaustion that NHS staff feel and the impact it has had on waiting lists.”
“One of the most effective measures according to the Office for Budget Responsibility was the introduction of the energy price guarantee coupled with payments for the most vulnerable in society. Again, should any colleagues need help with their constituents, they can direct their constituents to help on the Government website helpforhouseholds.campaign.gov.uk. The OBR said that our plan has helped to dull inflation by a couple of points and to protect 70,000 jobs, and that it has ensured that this recession is shallower than it would otherwise have been. There was some discussion during the debate about growth. I gently remind the House that we had the third highest rate of growth in the G7 from 2010 to 2022. I turn now to the important subject of the NHS workforce. The hon.”
“Maintaining the service relies, above all, on the foundations of a strong economy, which was exactly the purpose of the autumn statement. We acknowledge that there are specific issues that need tackling, and the Chancellor—himself a former Health Secretary—was frank in seeking to address them. Members may recall that we debated the pressures facing the economy, and the No. 1 issue facing the economy at the moment is inflation. It is precisely because inflation is at a generational high that the prices of everything our constituents buy and rely on have gone up, including, of course, food and heating. That hurts everyone, but it hurts the poorest the most. That is why, in the autumn statement, we laid out a plan to tackle inflation, to grow the economy and to protect public services.”
“It is a genuine pleasure to close this debate on behalf of the Government. I start by placing on the record my thanks to the extraordinary staff of the national health service, on whom this country relies day in, day out. As the Chancellor told this House less than three weeks ago, “The service we depend on more than any other is the NHS.” —[ Official Report , 17 November 2022; Vol. 722, c. 849.] Indeed, the NHS is one of the reasons why I took the decision to put myself forward for public office. The national health service diagnosed my type 1 diabetes at the age of three, and I have been genuinely moved and supported by the NHS ever since then. It is thanks to the NHS that I am standing at this Dispatch Box.”
“That will build on what are already significant statistics. Between September 2019 and August 2022, the NHS had more than 14,000 more hospital doctors and more than 29,000 more nurses and health visitors.”
“Forgive me. Perhaps the hon. Lady misunderstood me; I was trying to be collegiate in referencing what she had said about covid. We do know, of course, that there have been pressures on the workforce and on the NHS throughout its decades of history. Every generation has the new challenge of ensuring that the NHS meets the hopes, needs and expectations of our constituents. In opening the debate, my right hon. Friend the Secretary of State for Health and Social Care set out our plans for the NHS and explained that we are taking specific steps on issues such as workforce shortages. We will have an independently verified plan for the number of doctors, nurses and other professionals that we will need in five, 10 and 15 years’ time, taking full account of the need for better retention and productivity improvements.”
“To help colleagues, the initial findings by Patricia Hewitt, the former Labour Health Secretary, will be delivered to the Department within three weeks, which shows the pace of work that Ms Hewitt and others are taking on this important project. In addition, we are boosting NHS funding by £3.3 billion next year and by another £3.3 billion the year after that, helping to ensure that the NHS can take rapid action to improve urgent and emergency care and to get elective performance back to pre-pandemic levels.”
“I have not seen it myself but, from descriptions I have heard, I am not quite sure that is what he was trying to— [ Interruption. ] Members ask why I have not watched it. I was actually getting ready for a birthday party for my 10-year-old. We are allowed lives outside this place. For those who have commented on workforce figures over the past decade, between May 2010 and August 2022, 36,000 more hospital doctors and 38,000 more nurses and health visitors were recruited. We are also asking the NHS, like all public services, to tackle productivity and inefficiency. My hon. Friend the Member for Peterborough (Paul Bristow) emphasised the importance of that and brought his experience to the debate.”
“Overall, the NHS resource budget in England is expected to increase to £165.9 billion in 2024-25, up from £123.7 billion in 2019-20. Our determination to deal with the covid backlogs has seen the NHS already hit its first milestone in terms of waits of over two years, and it will go further, eliminating waits of over 18 months by April next year, over 15 months by March 2024, and over 12 months by March 2025. My right hon. Friend the Secretary of State compared that with the figures in Labour-run Wales, and noted that a fifth of the population there is waiting for care and remarked on the curious anomaly that Wales stopped publishing its workforce vacancy rates in 2011.”
“I will just make a little progress, if I may. Amanda Pritchard, the chief executive of the NHS, has said that this should “provide sufficient funding for the NHS to fulfil its key priorities” and shows that the Government are serious about their commitment to prioritise the NHS. The hon. Member for Coventry North East (Colleen Fletcher) and my hon. Friend the Member for Peterborough emphasised the role that pharmacies can play, and I hope we can discuss ways that different services can be delivered differently over the NHS in the coming months and years. My hon. Friend the Member for Winchester (Steve Brine), who chairs the Health and Social Care Committee, made the sound point that prevention is part of productivity.”
“The hon. Gentleman raises a serious point. I do not have the answer to hand, but I will ensure that the relevant Health Minister writes to him, because I understand why he raises it. There has been a great deal of discussion about nurses’ pay, and we are extremely regretful and very much hoping that accommodations and agreements can be found. To put into context recent pay rises, more than 1 million staff including nurses have benefited from a pay rise of at least £1,400 backdated to April this year. That is on top of the 3% pay rise they received last year. My hon. Friend the Member for Winchester asked an interesting question: does Labour support or oppose the independent pay review bodies, which set the recommendations that have been accepted?”
“What the NHS needs is a Government making the right decisions for the economy, so that we can actually afford a world-class health service. That is what this Government are determined to deliver. Question put.”
“I have listened with great interest to how the sum they have put in their motion is apparently going to answer all sorts of economic difficulties, particularly during consideration of the Finance Bill, and I am not sure it will quite add up. Interestingly, it was a Conservative Government who reformed non-dom laws to end the ability to claim this status permanently, and I note that the non-dom status survived during 13 years of Labour government. In any event, the Chancellor said very frankly in evidence to the Treasury Committee last week that he has asked officials to look at it. We have the workforce strategy, which will be delivered. NHS England has done considerable work, and we hope that it will report as soon as possible. It has been a real pleasure for me to be able to praise the NHS and thank its extraordinary staff.”
“I will not, because I have to finish. Turning to non-doms, I must congratulate the shadow Minister, the hon. Member for Ealing North (James Murray), on his florid use of language in relation to my advocacy efforts in the Finance Bill debates. I hope that I am able to answer his question in a moment. The motion deals with non-dom taxpayers. As I have said repeatedly—and I hope at some point it will get through—non-dom residents who live in the UK have to pay UK taxes on their UK income and gains, just like everybody else. That raised £7.9 billion last year, and non-doms have invested £6 billion. The area over which there is disagreement is the rules relating to foreign income, and the Opposition ask whether this is the answer.”
“As hon. Members will know, the Government introduced the levy in May this year as a temporary surcharge on the extraordinary profits being made on the oil and gas sector, driven by global circumstances.”
“It is a pleasure to represent the Government in this important Committee. At the autumn statement, my right hon. Friend the Chancellor set out the significant economic challenges that we face and our plan to ensure that we have economic stability, encourage growth and protect our public services. Securing fiscal sustainability in a responsible and balanced way inevitably requires some difficult decisions. We do not shy away from that, but we have sought to ensure that the heaviest burden falls on those with the broadest shoulders. The Bill’s first three clauses relate to the energy profits levy. Clause 1 increases the rate of the levy and addresses consequential technical matters. It will ensure that oil and gas companies benefiting from extraordinary profits due to exceptionally high prices will continue to pay their fair share of tax.”
“Clause 2 makes changes to the rate of the investment allowance within the levy to ensure that the total tax relief remains broadly the same following the increase in rate to 35%. Specifically, the clause reduces the rate of the investment allowance from 80% to 29%, effective, again, from 1 January next year. That will maintain the overall cumulative value of investment reliefs, which means that a company investing £100 will be able to claim £91.40 back in tax relief. To be clear, the investment allowance will remain at 80% for investment expenditure on upstream decarbonisation, so that we continue to support the transition to low-carbon electricity production. That will be legislated for in the spring Finance Bill, following further detailed technical work and consultation with interested parties.”
“I will happily do so. My hon. Friend will know the definition of “extraordinary” in relation to the electricity generators levy. We will come to the profits levy in due course. The Government are raising the rate of the levy from 25% to 35% from 1 January next year, bringing the headline tax rate for the sector to 75%. That is because commodity prices—particularly gas—are expected to remain above their long-term average for the foreseeable future. However, the Government want the oil and gas sector to reinvest its profits to support the economy, jobs and the UK’s energy security, which is why the levy has an investment allowance that means that businesses overall get a 91p tax saving for every pound that they invest, providing them with an additional, immediate incentive to invest.”
“The income tax higher rate threshold is still high enough to protect the vast majority of people from paying the higher rate of income tax; approximately 80% of taxpayers pay tax at the basic rate. Clause 6 will deal with those at the higher end of the income scale, to ensure that our return to sustainable public finances happens in a fair way. It will lower the additional rate threshold from £150,000 to £125,140 from April next year, meaning that income above that level will be taxed at 45%. Only the top 2% of taxpayers will be affected by this measure, which is expected to raise £800 million per year by 2024-25, with the vast majority of revenue—more than 80%—coming from those who earn more than £150,000.”
“Thanks to previous significant real-terms increases, it will still be more than £2,000 higher by April 2028 than if it had been uprated by inflation since 2010, with an estimated 1.6 million more people taken out of paying tax. Approximately 30% of people do not pay tax as a result of the personal allowance. I hope Government Members are proud that we have achieved that. This Government also enacted the largest ever increase to a personal tax starting threshold in July this year by raising the national insurance starting threshold to £12,570, ensuring that some of the lowest earners do not pay any tax. That means that in 2028 someone on the average salary of £28,000 will still pay almost £900 less in tax than if tax thresholds had gone up with inflation since 2010.”
“As the autumn statement sets out, the path to fiscal sustainability requires us to ask everyone to contribute a little more towards our public finances, but we are doing so in a fair way: those with more are being asked to contribute more. Clause 5 will set the personal allowance at £12,570 and the basic rate limit at £37,700 for 2026-27 and 2027-28. Those thresholds, which have already been fixed at the current levels until April 2026, will be maintained for a further two years until April 2028. I hope hon. Members will note that the personal allowance is still the most generous tax-free personal allowance of any G7 country.”
“The changes that the clause will introduce are also a step towards a possible simplified single RDEC-like scheme for all. Despite raising revenue, this reform is forecast to leave the level of R&D investment in the economy unchanged. More broadly, the Government have recommitted to increasing R&D spending to £20 billion by 2024-25. Ahead of the spring Budget, we will work with industry to understand whether further support is necessary for R&D-intensive SMEs. I know that is the point that most concerns several colleagues; I suspect that we will hear more about it in due course. Clauses 5 and 6 relate to income tax thresholds.”
“Despite the UK spending the most in the OECD on R&D tax reliefs, the current system does not provide good enough value for taxpayers. The cash value of the scheme that looks after small and medium-sized enterprises is currently three times that of the research and development expenditure credit. The corporation rate change due from April next year will make the issue worse by incentivising less R&D per £1 of taxpayer support. Sadly, the SME scheme’s generosity has also made it a target for fraud. The clause will therefore rebalance the generosity between RDEC and the SME scheme, specifically by increasing the RDEC rate from 13% to 20%, decreasing the SME enhanced deduction from 130% to 86%, and decreasing the SME credit rate from 14.5% to 10%.”
“Although the levy remains a temporary measure, the change simply reflects the fact that global factors are now expected to keep commodity prices, particularly gas prices, elevated for longer than was first anticipated. At the same time, the Government recognise that certainty is key for oil and gas investments. There will therefore no longer be an early phase-out of the levy ahead of the new March 2028 end date, according to prices. Together, the changes introduced in clauses 1 to 3 will raise approximately £20 billion over the next six years. The total revenue now expected from the levy is just over £40 billion over the same period. Clause 4 relates to rates of research and development tax credits. The changes it makes will ensure that taxpayers’ money is spent as effectively as possible.”
“Certainly. I hope the hon. Lady will agree that we all want to see more decarbonisation, which is precisely why we have set the net zero landmark achievement for 2050, as she knows. In relation to energy security, we have to be realistic about where we are. Much as some campaigners would like it, we cannot stop using oil tomorrow. We have to find reasonable and methodical ways of decarbonising, which is precisely what the investment allowances aim to do, while encouraging different businesses, and indeed those businesses, to invest in carbon-free and low-carbon forms of energy production. Clause 3 will extend the levy so that it ends on 31 March 2028 rather than in 2025.”