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Mr. Prisk: The Chief Secretary talks about the enterprise challenge. Is he aware of the rising tide of concern among those in the film industry that this is the third Finance Bill in three years that changes the way in which the industry is regulated? They believe that that creates serious disadvantages in locating films in this country. Why did the Government not get it right first time?
Mr. Boateng: The hon. Gentleman makes an interesting point. Indeed, we miss his contributions from the Opposition Front Bench to our debates on the economy. I hope that those who currently occupy that Bench will reflect on the contribution that he might make to a future Opposition Front-Bench team.
I know that the hon. Gentleman takes an interest in the film industry and I would have expected him to recognise the way in which we have listened to the industry and sought to work with it in identifying effectively and in a focused way the undoubted abuse of the system that was taking place and in responding to it. I hope that there is support on both sides of the House for the British film industry. I well remember when I was shadow Economic Secretary, sitting on the Opposition Benches[Interruption.] I did enjoy those days. Both sides of the House then made common cause on recognising that the film industry needed the support that we are endeavouring to give it. However, we have to be vigilant against the sort of abuse that was undoubtedly taking place.
Enhancing flexibility, tackling regulation and ensuring competitiveness inform the detail of this Bill and I will now turn to those matters. Clauses 10 to 13 mean that, this year, rates of capital gains tax and corporation tax will remain frozen, maintaining the 0 per cent. starting rate of corporation tax for small companies. Clause 144 brings the time-limited stamp duty relief in disadvantaged areas to an end as the new, better targeted local enterprise growth initiative drives forward local business-led regeneration, providing local authorities with the resources and flexibility to target the long-term issues that will promote enterprise in the most deprived areas.
Clauses 20 to 22 will help counteract a tax uncertainty that has proved to be a stumbling blockhere, I turn to the point made by the hon. Member for Buckinghamin forming university spin-out companies. This will provide rules that will apply to researchers who acquire shares in spin-out companies created with research institutions to develop intellectual property. The rules ignore the effect on a researcher's shares of the transfer of intellectual property into that company. They will also remove the consequent up-front tax and national insurance contribution charge.
Mr. Boateng: I do not recall mentioning that clause, but if I did, it was certainly in error. The clause that I referred to brings the time-limited stamp duty relief in disadvantaged areas to an end as the new better targeted local enterprise growth initiative drives forward local business-led regeneration.
The Bill also sets out key steps to ensuring that our country is prepared for the challenges of the future. For example, it is important that young peoplefirst-time buyerscan have access to the housing market. I know that all of us are concerned about that in one way or another. Therefore, the clauses that double the zero-rate threshold for stamp duty land taxfrom £60,000 to £120,000will be particularly welcome. That means that a purchaser of a residential property who completes a purchase on or after 17 March 2005 will not pay stamp duty land tax if the purchase price is £120,000 or less.
We have had this discussion in the past. The hon. Gentleman knows that, as a result of the
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amendments that we have made, there is an increase in the yield. That is clear in the Red Book and we have never made any pretence otherwise, but we have focused and targeted the relief better. We have ensured that we are assisting first-time buyers. Doubling the threshold means that some 50 per cent. of first-time buyers will not pay stamp duty, and that must be welcomed by all.
Mr. Dorrell: Will the Chief Secretary confirm for absolute clarity that, contrary to the impression that the Chancellor of the Exchequer gave in his Budget speech, the benefit of raising the threshold from £60,000 to £120,000 is more than paid for by withdrawing the relief that had the purpose of encouraging non-residential development in deprived areas? That is the effect of the package of measures on stamp duty land tax that the Government have introduced.
Mr. Boateng: We have focused relief where it can do the most good. I should have thought that everyone would welcome that. I do not recognise the presentation of the Budget that the right hon. Gentleman describes. The combined effect of the Budget measures is that revenues from residential property transactions are forecast to fall by £220 million and revenues from commercial property transactions are forecast to rise by £580 million. We have always made that absolutely clear. It has always been clear in the Red Book for all to see. It was always crystal clear in the extensive debates and discussions that my right hon. Friends the Chancellor and the Paymaster General, my hon. Friends the Financial Secretary and the Economic Secretary and I held with Opposition Members in the immediate aftermath of the Budget.
I always enjoy the contributions of the right hon. Member for Charnwood (Mr. Dorrell) because he has extensive knowledge and experience of government. However, it is rich for him to now play the innocentthe shocked maidenin such a way about the presentation of these matters. I do not think that he can expect us to take his complaints seriously.
Mr. Boateng: I am sure that the hon. Member for Hertford and Stortford (Mr. Prisk) does know about the matter, so it is a pity that he will not be sharing his knowledge with the House from the Front Bench, if he knows so much about it. Several of us who watch such things closely certainly have the view that he deserves to be there.
The Bill sets out the key steps necessary to ensure that our country is prepared for the challenges of the future. For example, it is important for us to use the Bill to build on the progress that we have made on home ownership, which has been not only referred to extensively by ourselves, but recognised by others. As I have said, it will exempt an additional 300,000 buyers each year and more than 50 per cent. of first-time buyers. In regional terms, it will exempt approximately 70 per cent. of buyers in the north and throughout Wales, Scotland and Northern Ireland, and more than 50 per cent. of buyers in the midlands.
Clause 98 focuses on the inheritance tax threshold for each of the next three tax years, with increases above indexation. It sets out the inheritance tax threshold at £275,000 for 200506, £285,000 for 200607 and £300,000 for 2007- 08. It also ensures that 95 per cent. of estates remain tax free, which is something that we must all bear in mind.
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