§ 7. Mr. ColvinTo ask the Chancellor of the Exchequer what representations he has received on the basic rate of corporation tax.
§ Mr. LamontA number.
§ Mr. ColvinI thank my hon. Friend for that very full reply. Will he confirm that over the past five years, in spite of cutting the rate of corporation tax from 53 per cent. to 35 per cent. for big companies and from 42 per cent. to 25 per cent. for small companies, the revenue actually received by the Exchequer from corporation tax has more than doubled? Although capital allowances have been reduced, investment in manufacturing industry is running at an all-time high. As the patient has responded so well to the treatment, why can we not have a bit more of the same tax-cutting medicine?
§ Mr. LamontI note my hon. Friend's early Budget representation and I am sure that my right hon. Friend has done so as well. As my hon. Friend says, the United Kingdom has led the world in cutting corporation tax rates. We have reduced those rates by 17 points and, as my hon. Friend has said, the yield has soared. Of couse, that is largely because of the sound economy and the great 460 upsurge in profits that we have experienced. We shall certainly keep the matter under review as my hon. Friend suggests. It is also true that investment has in no way suffered. Indeed, investment has boomed since we removed capital allowances and reduced the rate.
§ Mr. FoulkesCan the Minister give a clue about whether the number of representations that he has received is nearer to the real level of inflation or to the fiddled figure that is used by his right hon. Friend the Chancellor, which does not include housing costs?
§ Mr. LamontIt was an extremely small number.