§ 3. Mr. Nick St. Aubyn (Guildford)What estimate he has made of the level of tax to be paid by business in 2000–01 as a result of the Budget. [83190]
§ 7. Mr. Eric Forth (Bromley and Chislehurst)What estimate he has made of the change in overall tax yield from business in 2001–02 as a result of the Budget. [83194]
§ The Chief Secretary to the Treasury (Mr. Alan Milburn)All companies that pay tax will benefit from the cuts in corporation tax that were announced in this year's Budget and in previous Budgets.
§ Mr. St. AubynAs a result of the Government's first Budget and the changes in pensions tax, business will have to pay an extra £5.5 billion in taxation next year. As a result of the Government's changes in corporation tax in their second Budget, business will have to pay an extra £2 billion in taxation next year. As a result of the environmental levy in this year's Budget, business will have to pay an extra £1.75 billion next year. Does the Chief Secretary realise that business can pay those extra 400 taxes only by charging its customers more, and that more than £9 billion will therefore be taken by stealth from the pockets of British people?
§ Mr. MilburnI am happy to compare our record on business taxes with that of the Conservative Government. I remind the hon. Gentleman that, in their first four years in power, the Conservative Government maintained a corporation tax rate of 52p in the pound. In our first two years in power, we have cut the main corporation tax rate to 30p in the pound and the small companies rate to 20p in the pound and have introduced a new 10p starting rate of corporation tax. Those are the lowest company taxes in the history of this country, the lowest company taxes of any country in Europe, and the lowest company taxes of any major industrialised country in the world. The hon. Gentleman should be congratulating the Government.
§ Mr. ForthMay we now please have an answer to the question? For the Chief Secretary's benefit, my question is:
What estimate he has made of the change in overall tax yield from business in 2001–02".That is a straightforward, factual question. Why does the right hon. Gentleman insult not only the House of Commons but the entire business community by failing to answer the question, through impudence and impertinence—or is he being deliberately evasive because he knows that the answer is that business is paying more tax?
§ Mr. MilburnThe right hon. Gentleman refers to the views of the business community. In the past, we have listened—[HON. MEMBERS: "Answer the question."' Opposition Members are getting very excited; they should calm down for a moment. The right hon. Gentleman rightly referred to the views of the business community about the Budget and previous Budgets. I remind him what some leading members of the business community have been saying about the Budget. I remind him, for example, that the hon. Member for Tunbridge Wells (Mr. Norman) said:
Overall. not a bad business Budget.
§ Mr. Robert Sheldon (Ashton-under-Lyne)Is my right hon. Friend aware that the reduction in the rates of corporation tax has been widely welcomed, as has the extension of first-year capital allowances to small and medium-sized companies? Is he also aware that any incentives to manufacturing industry are difficult to obtain? One of the few ways of achieving those incentives is through capital allowances, so will he perhaps consider some increase in the capital allowances, particularly for manufacturing industry?
§ Mr. MilburnI am grateful for my right hon. Friend's welcome for the Budget measures. As he rightly says, the cuts in corporation tax benefit 270,000 companies, and companies paying tax up to the level of £50,000 a year stand to benefit from those cuts. Many more companies on top of that—in the manufacturing and service sectors—will benefit from the extension of first-year capital allowances. I know that that is widely welcomed, in manufacturing in particular. We recognise the difficulties that some manufacturing companies face at the 401 moment, and we hope very much that the Budget measures will help them to grow and prosper for the future.
§ Mr. Geraint Davies (Croydon, Central)Does my right hon. Friend agree that, had the Government accepted them, the total cost of the Opposition proposals made in the Committee considering the Finance Bill in the past two weeks—the abolition of the fuel escalator; the abolition of any increase in duty on tobacco; the lowering of vehicle excise duty for 1400 cc cars; and the retention of the married couples allowance for all new pensioners, so that we will all have to get married when we are 65—would have been billions? Ultimately, that money would have to be paid by the wealth creators and businesses of this country. Their commitment to £40 billion for health and education combined with low tax for business is a complete sham—crocodile tears from a discredited Opposition.
§ Mr. MilburnMy hon. Friend is absolutely right. This is an example of Tory taxation by stealth. The Tories' figures do not add up, and no amount of double-talk from the shadow Chancellor about his commitment to schools and to hospitals can disguise that fact. If they had their way, they would load more taxes on business and, indeed, on individuals. They cannot be trusted, either with the state of the public finances or with our country's vital public services.
§ Dr. Vincent Cable (Twickenham)Is the Chief Secretary aware that there is a great deal of concern in British business that, as a result of the Government's perfectly valid concern about tax avoidance, there could be a considerably increased tax burden on legitimate businesses, notably through Inland Revenue 35 as it is applied to the computing industry and through the application of value added tax on the internal transactions of banks? How much revenue does he propose to raise in that way, and what assurances is he giving to business that he will not penalise legitimate companies?
§ Mr. MilburnIf the hon. Gentleman cares to look in the Red Book, he will see what the tax yield would be from that measure. As we have made clear in the Finance Bill Committee, no legitimate service businesses will be affected by this proposed measure.
§ Mr. Peter L. Pike (Burnley)My right hon. Friend will know that the climate change levy is deemed to be tax neutral, because of the associated national insurance rebate, but does he recognise that there is a severe threat that jobs in the high-energy industries will be transferred abroad? That would be a severe penalty, and there would be no environmental advantage from it. I hope that that will be taken note of in the discussions that are taking place; I know that the Government are anxious to preserve jobs in this country.
§ Mr. MilburnAs my hon. Friend is aware, an extensive consultation about how best to introduce the new climate change levy is under way. I can tell him and the House that my right hon. Friend the Chancellor met the Confederation of British Industry yesterday to discuss that, among other matters. We are well aware of the 402 concerns of the energy-intensive industries, which is precisely why we are going through the sort of consultation exercise that we are.