HC Deb 27 October 1994 vol 248 cc999-1000
9. Mr. Nigel Evans

To ask the Chancellor of the Exchequer what comparison he has made between the corporation tax in Britain and that of major competitors; and if he will make a statement.

Sir George Young

Levels of corporate taxes in the United Kingdom's major competitor countries are monitored continually. The United Kingdom continues to have the lowest main rate of any of the major industrial countries.

Mr. Evans

In confirming that the United Kingdom has the lowest rate of corporation tax in the European Community, does my right hon. Friend agree that it is due to the fact that we have given great encouragement to our medium-sized and especially our smaller companies? We have allowed them to keep more of their own money, thereby allowing them to reinvest it in the companies. That has allowed them to increase their productivity, especially in manufacturing, and has led to record exports being achieved.

Sir George Young

I join my hon. Friend in paying tribute to the small and medium-sized enterprises to which he has referred, which have done so well in the past few years and have created many new jobs. On the substance of his question, I recognise that this country operates in a competitive world market. We need to attract inward investment from some of the multinational companies to create secure jobs in growth industries. The fact that we have one of the lowest rates of corporation tax is a clear signal that we welcome such investment.

Mr. Andrew Smith

I congratulate the Financial Secretary on his appointment. Will he confirm that the Government have decided not to publish the report on the review of dividend taxation and related matters which was initiated by the former Financial Secretary? Given that the Government's record on investment is so poor, should not the public, industry and especially this House have the opportunity to examine the evidence for themselves on the basis of a full and comprehensive report?

Sir George Young

There never was a report in the terms that the hon. Gentleman has mentioned; nor was there ever any intention to publish such a document. There will be ample opportunities in the Finance Bill and on other occasions to debate the important issues that he has raised.

Mr. French

In comparing the tax regimes in Britain with those of other European countries, will my right hon. Friend confirm that he is now fully satisfied that a business that wishes to operate a pan-European mutual fund, including the provision of FCPs, or fonds communs de placement, will not find fiscal reasons for locating in Dublin or Luxembourg as opposed to London?

Sir George Young

I very much hope that that is the case. There are many letters on my hon. Friend's question and I should like to write and confirm what he has just said. Over the past year or so, a third of inward investment into the European Community came to the UK. That confirms his point: that this is an attractive location from which to base enterprise.