HC Deb 27 November 1997 vol 301 c1086
16. Mr. Mullin

What plans he has to review the effectiveness of corporation tax; and if he will make a statement. [16600]

Mr. Geoffrey Robinson


Hon. Members

Come on.

Mr. Robinson

I apologise. I did not realise that question No. 15 had been passed. I apologise for the delay in locating Question No. 16.

We are satisfied with the excellent measures that my right hon. Friend the Chancellor took in the July Budget and announced in the pre-Budget document which we discussed this week. They put corporation tax on an excellent long-term basis. They do not distort competition and they make for investment. We are pleased with all the long-term, principled reforms that we have carried through.

Mr. Mullin

Has my hon. Friend noticed that some companies do not pay their fair share of corporation tax? One thinks, for example, of the Murdoch empire, which I believe paid only about 2 per cent. of its profits in corporation tax. Does he agree that that is unfair on companies which do pay their fair share? What plans does my hon. Friend have to ensure that all companies do so?

Mr. Robinson

If my hon. Friend brings the matter to the attention of the corporate division of the Inland Revenue, I am sure that it will investigate, if it is not already doing so. My hon. Friend will be aware that the Government have already announced four tough anti-avoidance measures for the corporate sector, which we expect will yield £1 billion in savings.

Mr. Yeo

Does the Minister understand that the changes in corporation tax announced two days ago greatly increase the amount of tax that companies will pay in the next four years? As that will inevitably reduce new investment by companies, what assessment did the Treasury make of the number of jobs that will be destroyed directly as a result of the Chancellor's statement?

Mr. Robinson

The statement has been welcomed by the Confederation of British Industry and by companies throughout the country because they recognise the principled reasoning behind it. The hon. Gentleman is getting his cash flow mixed up with his profits; if he would like a lecture on the subject after Question Time I shall be happy to give it to him.