§ 12. Mr. John GreenwayTo ask the Chancellor of the Exchequer what representations he has received on the taxation of businesses.
§ Mrs. Gillian ShephardI have received a large number of such representations.
§ Mr. GreenwayWhile recognising that high rates, which are essential for the defeat of inflation, are causing difficulties for British business, does not my hon. Friend agree that businesses can also be helped by fiscal policy? Has she seen the Budget submission by the Institute of Directors calling for a further reduction in corporation tax as a means of promoting recovery and stimulating investment, including much of the inward investment that is placing the country in such good stead?
§ Mrs. ShephardI have seen the representations from the IOD, which will be considered by my right hon. Friend in the run-up to the Budget. I feel sure that the IOD will have welcomed yesterday's interest rate cuts. However, I remind the institute and my hon. Friend the Member for Ryedale (Mr. Greenway) that the Government have a good record on reducing taxation for businesses. Corporation tax was 1110 reduced from 52 to 35 per cent.—one of the lowest rates in the industrialised world. We have the most favourable corporation tax regime for small businesses in the EC.
§ Mr. BattleIs the Minister aware that, overshadowed by the poll tax, the uniform business rate is hammering business into the ground and into the red as the bills come in? That tax was directly imposed by central Government, not local government, and the Government are responsible for its imposition and collection.
§ Mrs. ShephardOver the past 10 years, rate poundages rose by 37 per cent. more than rises in the retail prices index, mostly due to the irresponsible rate rises imposed by Labour-controlled councils. Now, increases are limited to the RPI, which means they are more predictable and help business to plan. As a whole, business will be paying £1 billion less in 1991 than they would have done under the old system, which has to be good news.