§ 10. Mr. Barry Sheerman (Huddersfield)When he will next meet the CBI to discuss its reactions to his recent Budget and the assistance that it gives to the manufacturing sector. [116612]
§ The Chancellor of the Exchequer (Mr. Gordon Brown)I regularly meet with the Confederation of British Industry and other bodies. Our Budget measures for manufacturing include making permanent capital allowances, introducing a new research and development tax credit, introducing a regional venture capital investment fund of £1 billion, 100 per cent. capital allowances for new technology, the continuation of the lowest corporate tax rates for small businesses and large companies of any of the G7 countries and, of course, the maintenance of economic stability.
§ Mr. SheermanIs my right hon. Friend aware that businesses up and down the country are grateful not only for the Budget for business but for the three Budgets that he has introduced, which have been very good for our economy? Is he also aware that British business is responding by trying to reach higher levels of productivity, and is gradually succeeding? Businesses will also be very pleased at today's announcement that there will be no rise in interest rates, as they are still very concerned about the value of the pound against the euro.
§ Mr. BrownThe Government's policy is for stability and steady growth. That is achieved by having monetary and fiscal stability. I will continue to support the Bank of England in the decisions that it makes.
Manufacturing output is rising and productivity has risen by 5 per cent. Although I recognise the difficulties caused for manufacturing by the strength of the pound against the euro, the industry is not only responding but winning in many of our world markets.
§ Rev. Martin Smyth (Belfast, South)I welcome the steps that have been taken to help industry, but will the Chancellor acknowledge that the textile industry in particular is under tremendous threat? Have there been any specific discussions with the Department of Trade and 1148 Industry and representatives of the textile industry to protect one of our basic industries, which has provided employment for our people for generations?
§ Mr. BrownI understand the issue that the hon. Gentleman raises about the textile industry in Northern Ireland and the whole of mainland Britain. The measures that we have taken in the Budget, such as making permanent the 40 per cent. capital allowances, will be of benefit to textiles and other manufacturing industries. I know that that is what the CBI and other organisations, including the British Chambers of Commerce and the Institute of Directors, were pressing for, and it has been achieved under a Labour Government. I also know that for companies in the textile sector which are innovating and bringing forward new products and processes, the research and development tax credit—which will be worth £150 million and available even before profit is made from these inventions—will be of help. For companies which invest more, the regional venture capital investment funds will help Northern Ireland as well as mainland Britain.
§ Mrs. Rosemary McKenna (Cumbernauld and Kilsyth)Does my right hon. Friend agree that while some sections of the textile industry are suffering, Scotland has very successful garment and fashion businesses? Does he also agree that although all the fiscal measures that he has introduced help the manufacturing sector, the manufacturing sector is also helped by the education and training that provides a skilled work force and a healthy community?
§ Mr. BrownOur policies for education, which are raising standards in schools, are essential for creating the modern skills base that industry needs. In addition, with the CBI, the Institute of Directors and the British Chambers of Commerce, we are launching a national enterprise campaign that will link businesses to schools. A thousand business ambassadors will help young people learn about commerce and business for the future.
On the future of business, my hon. Friend will welcome the fact that, whereas 1.2 million businesses were employing people when we came into power, there has been a 10 per cent. growth during our time in office. There are now 800,000 people in jobs who were not in jobs in 1997. We are continuing to pursue a policy of employment opportunity for all. Economic stability is our policy—we will not allow Britain to return to the boom and bust of the Tory years.
§ Mr. Richard Ottaway (Croydon, South)Will the Chancellor take the CBI's advice on IR35? Four weeks ago, the Paymaster General criticised the Conservative party for standing up against the IR35 stealth tax on Britain's high-taxed, high-tech entrepreneurs, but has the Chancellor read the report in Tuesday's Evening Standard, headlined: "Tax climbdown on way as IT experts quit UK"? Will he confirm that he is under pressure from the e-commerce tsar, Mr. Allan, and from the Minister for Small Business and E-Commerce, to change his stance by easing up on IR35? It is not only the Conservative party that says that he is wrong—his own party thinks so too.
§ Mr. BrownNo, we are not under pressure from either of the people mentioned by the hon. Gentleman, 1149 who clearly has no documentary evidence to prove what he says. It is interesting that the Conservatives say nothing about the basic rate of tax, or the 10p starting rate, or the lowest corporate tax rates in Europe, or the lowest small business tax rates. They are, however, very interested in tax avoidance. I have often thought over the past few days that the only tax credit that interests the Conservatives is a tax credit for Lord Ashcroft of Belize as he comes back to this country.
We published our measures on IR35 last April, and they were followed by a discussion period and a consultation document. We made our decision last summer, and it was the right decision. Everyone should pay a fair rate of tax, and there should be no tax avoidance. It is about time the Opposition supported fair tax.