Contribution
I rise to speak to amendments 112 to 139, which stand in my name and those of other hon. Members. When the Chancellor introduced the Budget, she described it as a Budget for growth and a Budget to encourage business. The natural assumption was that we would have growth across the whole United Kingdom, that there would be no discrimination against any part of this United Kingdom, and that what was available to encourage growth in one part of the UK would be available in the others. That would be a natural expectation, given that we are a United Kingdom.
Sadly, this Bill does not live up to that expectation, because clauses 13 to 15 introduce scandalous discrimination against businesses in Northern Ireland. Clauses 13 to 15 are about updating the assistance to businesses in England, Scotland and Wales, but not to those in Northern Ireland. These are the very levers that enable businesses to grow. Clause 13 is about enterprise management incentives, which were introduced in 2000. Since then, thousands of companies have used them as a tool to attract, retain and reward their employees through options, enabling employees to acquire shares in a company without liability for income tax or national insurance contributions. Instead, any gain is usually subject to lower rates of tax under capital gains tax.
Under the enterprise management incentive, there have been caps on what is available. Under clause 13, the EMI limit on company options will be increased to £6 million for Scotland, England and Wales, but it will stay at £3 million for Northern Ireland. The EMI limit on gross assets will be increased to £120 million in England, Scotland and Wales, but limited to just £30 million in Northern Ireland. In England, Scotland and Wales, the number of employees a company can have will be lifted to 500, but Northern Ireland will retain the figure of 250. On that measure—one of a trio of measures capable of encouraging businesses to grow—we see an uplift for Great Britain, but a stagnation in the assistance for Northern Ireland.
We see the same in clause 14 on the enterprise investment scheme. That scheme, along with the venture capital trusts covered in clause 15, has been a very useful tool for companies attracting investment so that they can grow. It has been described by the British Business Bank as
“a government-driven initiative designed to stimulate investment in early-stage businesses through venture capital. It serves as a significant source of capital for these companies while also providing attractive tax reliefs to the investors who support them.”
What is happening to the enterprise investment scheme across this one United Kingdom? In England, Scotland and Wales, the gross asset requirement will be raised to £30 million, but in Northern Ireland it will stay at £15 million. There is an uplift for both standard companies and new growth companies in GB, but none in Northern Ireland. A knowledge-intensive company’s lifetime investment limit in Scotland, England and Wales will be raised to £40 million, but in Northern Ireland it is capped at £20 million. It is the same in clause 15 on venture capital trusts. Again, Northern Ireland is trapped at the level set in 2012, whereas the rest of the country is allowed to move into 2026.
When this Government talk about growth and pretend that it is growth for the whole United Kingdom, the fundamental question I have to ask is this: why does this Budget, in clauses 13 to 15, inhibit growth in my part of the United Kingdom while not giving a level playing field, not allowing equality across the United Kingdom and denying parity to Northern Ireland in this way? This amounts to systemic discrimination against business in my constituency. One is tempted to ask: are the Government trying to incentivise companies to locate in GB? Is that the motivation, because if someone about to set up a company realises that their venture capital thresholds and the incentives they could be given are higher in GB, why would they go to Northern Ireland?
That is the disparity this Government are creating, and it is certainly not because the private sector is doing too well in Northern Ireland. Alas, Northern Ireland still has 27% of its workforce in the public sector in comparison with the UK average of 18%. The answer, sadly, lies in the fact that this Government and this Parliament embrace that discrimination against Northern Ireland because they are wholly beholden to the European Union. Northern Ireland, under the iniquitous Windsor framework, has been left under the EU state aid rules. That is the effect of article 10 of the Windsor framework. It leaves us subject to the state aid rules of foreign institutions, not the state aid rules of this United Kingdom. That has caused the Government, in their beholden attitude to the EU when it comes to enterprise schemes, venture capital and all the things in clauses 13 to 15, to simply retain Northern Ireland at the levels of support that were permitted pre-Brexit. Why? Because they are not prepared to face down the EU on the imposition of their foreign laws on my part of the United Kingdom in respect of support for industry.