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Finance (No. 2) Bill

I have given way several times to the hon. Member for North Durham (Mr. Jones) and I want to make some progress. I may give way later to the hon. Member for Wirral, West (Stephen Hesford), particularly given that we greatly enjoyed his intervention on my Second Reading speech last week. I move on now to deal with the reaction of the IT industry, including the companies that had been created to fulfil the home computer initiative objectives by facilitating the supply of computing equipment to both public and private sector enterprises, many of which will go out of business if the provision goes through. The Government’s regulatory impact assessment, which was rushed out just last week in response to the furore over this issue, admits that, exceptionally, no small firms impact test has been carried out in this instance, although that would usually be the procedure. It also notes in paragraph 62, in classic Whitehall jargon:"““HMRC does expect there to be an impact for HCI providers. Particularly those in the small business sector that have been set up specifically to provide HCI schemes . . . will be impacted more significantly in the short term than businesses with more diversified business models””." The IT industry body, Intellect, put it more succinctly after the Budget:"““There are about 2,000 individuals working in this industry that Gordon Brown has just signed redundancy notices for””." Before Ministers seek to accuse anyone of crying wolf in this matter, I have to inform the House that the programme of redundancies in the companies established to support the HCI initiative has, unfortunately, already begun. Last month, Red PC became the first company to fall victim to the abolition of the HCI when it was reported that it was about to call in the liquidators. On 24 April, another company, Encompass, announced that it was closing down. As the managing director subsequently told the press:"““As a small company solely involved in providing HCI, I was completely knocked back by the Chancellor’s decision. The government’s Digital Strategy sets targets for 2008 so I thought the HCI scheme would run until then, and at the very least we would have 12 months notice. To be given 15 days is appalling.””" At a time when unemployment is unfortunately on the rise again, it will be a great shame to see further high-tech companies going into liquidation if clause 61 remains in the Bill. Most importantly, Mrs. Heal, millions of people across the country who might have been able to take advantage of the scheme to improve their and their families’ IT skills are now to be denied that opportunity. The Chancellor will now disappoint them if the scheme is withdrawn. Moreover, even those on the existing scheme will be allowed to benefit from it only until whatever agreements they have reached with their employers have expired. That is confirmed by paragraph 71 of the regulatory impact assessment:"““Changes to the exemptions for computers and mobile phones were announced in the Chancellor’s Budget statement on 22 March 2006 and will take effect from 6 April 2006. However those people already participating in schemes based on the law as it applied prior to 6 April will not be affected until the period of their current agreement expires and they enter into a new agreement.””" In other words, at that point they will be caught by the changes. Even the 500,000 people who are benefiting now will not do so for much longer, once their individual agreements with their employers expire.