My right hon. Friend is, characteristically, absolutely right to make that observation. I think he will also agree that while this is welcome, and will, absolutely, cut the cost of interest, it also reminds us that interest rates are incredibly volatile, and no Government should rely on interest rates remaining low for an incredibly long time.
I have often said that small and medium-sized businesses are the beating heart of the economy, and rightly where our focus should be. If SMEs are the heart, then cash flow is their lifeblood, and that is where we must focus our help most, so I very much welcome the emergency support package for SMEs that my right hon. Friend the Chancellor set out today. If I may, I will make three quick observations about what more can be done. First, on time to pay, I strongly welcome the announcement today to extend the existing HMRC scheme. While it is absolutely right that we carry out the fundamental business rates review that we set out in our manifesto, this will not happen overnight, as the Chancellor recognised, so we need to act now. I do welcome the announcements on business rates that he made today, but may I also suggest that the time-to-pay arrangement is extended to business rates too? Although they are collected by local authorities, not HMRC, it is possible to delay collection while making sure that no local authority loses out in terms of cash flow.
Secondly, on support for workers, firms should not have to shed workers because of temporary cash-flow problems. That is why I would like to keep open the option of a temporary cut in employers’ national insurance —perhaps over a three-month period—thereby relieving the cost of labour.
Thirdly, since the financial crisis, it is true that monetary policy has lost some of its potency. A decade ago, central banks were the star turn; now they are more like the supporting act, but they can help. That is why I strongly welcome the action by the Bank of England that was announced this morning, and I am pleased to see the co-ordination that has taken place with the Treasury. I am particularly encouraged by the restart of the term funding scheme, especially how the incentives have been set out to encourage an increase in lending to SMEs.
While the coronavirus has captured the attention of the front pages, my right hon. Friend the Chancellor is right not to lose sight of the long-term failures of UK economic policy under successive Governments—failures that have caused profound regional inequalities and a sense of anger and betrayal in many of our communities. We need to put people and place back at the heart of a more human capitalism. I therefore welcome the investment in skills and education, especially the £1.5 billion for FE capital. We should think about not only the flow of students but the stock of skills that we have in our country. There are talented individuals who have left full-time education and would benefit from retraining. That is why I am unapologetically keen on a long-term plan for skills, including the right to retrain for all working adults.
It is clear from today’s Budget that my right hon. Friend shares my enthusiasm for the infrastructure revolution and my conviction that, with the right scale and the right mix of investment in roads, rail, digital, decarbonisation and flood defences, we can tackle our most significant economic challenges: low productivity and regional inequality. As I have long said, we should take advantage of record low interest rates to invest properly in our economic future.
I welcome the Chancellor’s indication that he will continue the work that was begun to rewrite the Green Book, so that we can better allocate investment across the nations. I hope that he will look carefully at what else we can do to help the infrastructure revolution, including looking at planning, especially reform of the compulsory purchase order regime; the infrastructure delivery model, so that we do not have a repeat of the overspending on HS2; and labour market requirements at a time of record employment.
I urge the Chancellor to consider in his next fiscal statement 100% capital allowances—in other words, full expensing for businesses, to encourage them to invest more in capital. I want to end by underlining the importance of fiscal responsibility.