§ 1. Mr. Barnettasked the Chancellor of the Exchequer how many solvent close companies have gone into voluntary liquidation since the Finance Act, 1965, came into effect; what estimate he has made of the number of cases in which the liquidation was due to the Finance Act; and what were the different trades.
§ The Financial Secretary to the Treasury (Mr. Niall MacDermot)I regret that separate statistics are not available in relation to close companies.
§ Mr. BarnettWhile accepting that Answer from my hon. and learned Friend, may I ask whether he would agree that a great deal of nonsense is spoken on the subject by hon. Gentlemen opposite, and that in fact the Corporation Tax is very largely of great benefit to small family companies? Where, as they often do, they pay no dividends, Corporation Tax is of very great help to this type of company.
§ Mr. MacDermotI would agree with my hon. Friend. The figures that are available are for motions registered by private companies for voluntary liquidation. In the period mentioned in the Question, they show 2,135 out of a total of over half a million private companies, and there have been 15,000 new registrations in the same period. These figures do not support the idea that there has been widespread liquidation of close companies as a result of the Finance Act.
§ Mr. William ClarkDoes the Financial Secretary agree that the implications of Corporation Tax have not got through the pipeline to close companies, and also that this Question is quite irrelevant at this stage of our financial year?
§ Mr. MacDermotI think that the message is getting through to these companies who go in for a policy of a high level of ploughback, because they will have considerable benefit from the tax.