§ That, then, is how we propose to reform the structure of corporation tax. But we need not only to reform the structure but also to reduce the burden of the tax. I have already referred to the marked fall of the share of company profits in the total of domestic incomes, and this in turn has contributed to a slow-down of industrial investment. Sustained growth can only be based on an adequate level of profitability not only before tax but after tax as well.
§ In October we reduced the rate of corporation tax payable for the financial year 1969 by 2½ percentage points to 42½ per cent. I now propose a further cut to 40 per cent. to be operative for the financial year 1970, that is, in respect of the tax generally payable on 1st January, 1972, on profits earned in the twelve months from 1st April, 1970. The cost of this change will be £55 million in 1971–72 and £105 million in a full year.