Date: 2023-04-18
James Murray: I thank the right hon. Gentleman for his intervention but I feel he rather misses the point. Surely having a temporary change merely moves investment around, rather than increasing its overall level, as the OBR has set out. We have the lowest investment as a percentage of GDP in the G7, so the importance of increasing investment should be agreed by Members in all parts of this House. We need a wider plan that will give that stability and certainty, which is exactly what my right hon. Friend the shadow Chancellor has set out. She has set out Labour's mission to secure the highest sustained growth in the G7, which means that in government we would review the business tax system and set out a clear road map to provide that certainty and boost investment. New clause 3 speaks to that, and perhaps the right hon. Gentleman would like to join us by voting for it later this evening. It would require the Government to follow our lead by initiating that review of business taxes that we want to see now. Such a review would make recommendations on how to give businesses more certainty about the taxes they need to pay, and how to make sure that the system of capital allowances operates effectively to incentivise investment. The new clause would require the review to be conducted, and recommendations on how to increase certainty and investment to be published, within six months of the current Finance Bill becoming law. I urge Ministers and, indeed, Back Benchers to accept and support new clause 3. If they do not, I at least encourage Ministers to give as much certainty as possible by making it clear what their plans for capital allowances are beyond the three-year period covered by clause 7. Beyond the capital allowances in clauses 7 to 9, the Bill introduces other reliefs relating to businesses in clauses 10 to 15. I wish to ask the Minister a fairly technical point about clause 10 and its associated schedule 1. As we know, clause 10 introduces changes to the research and development tax relief for small and medium-sized companies and to the R&D expenditure credit, which is mainly claimed by larger companies. The clause widens qualifying expenditure to include data licences and cloud computing services, and introduces new compliance measures. More widely, we are concerned that the Government's piecemeal and rapid changes to R&D reliefs are causing uncertainty. As we know--we have discussed this already today--such an approach is harmful to the effectiveness of reliefs and does not help the UK's position in attracting investment. We are also aware, however, that there are concerns that the claim notification measure in this clause may be poorly targeted. Although it will prevent some dubious claims, it may well mean that many genuine claims, and disproportionately those from smaller companies, will fall out of time. On the detailed changes introduced by clause 10, I wish to ask the Minister a specific question about the wording of a new power for His Majesty's Revenue and Customs, to which the Chartered Institute of Taxation has helpfully drawn our attention. Paragraph 14 of schedule 1 introduces a new power for HMRC to remove a claim for R&D relief from a corporation tax return when an officer of HMRC "reasonably believes that a claimant company has failed to comply with a requirement relating to the making of the claim". There is no right of appeal against a decision of HMRC made pursuant to this power. It seems that the Government's intention is for this new power to be used only in relation to the new compliance measure introduced by the Bill. However, it is not clear that the wording of the new legislation itself is limited in that way. To suggest a potential solution to this problem, we have tabled amendment 26. It is a clear and technical amendment, drafted by the Chartered Institute of Taxation, and I encourage the Minister to accept it and make it part of the Bill. Clause 12 introduces a new investment allowance at a rate of 80% for oil and gas companies for investment in the decarbonisation of upstream petroleum production activities. As Members from all parts of the House will know, Labour has been calling for a windfall tax on oil and gas giants since January last year to help fund support for people struggling with the cost of living. After months of pressure, the current Prime Minister, and other Conservative Members, were finally dragged kicking and screaming into introducing an energy profits levy in May last year. At every turn, however, the Government have left loopholes and weaknesses in their version of the windfall tax, and they have stubbornly refused our calls to address them. The Conservatives' refusal to strengthen the windfall tax means that billions of pounds of profits of the oil and gas giants are being left on the table. They are refusing to strengthen the windfall tax on those oil and gas giants while, at the same time, pushing up taxes for people across the country through a 5% hike in council tax. If we were in power, a Labour Government would freeze council tax this year, funded by a proper windfall tax on the oil and gas giants. That is Labour's fair way to help families through the cost of living crisis. All the  Conservatives have to offer is yet more tax rises on working people. If any Conservative Members agree with us, they can join us in voting for new clause 6.