HC Deb 20 July 2000 vol 354 cc533-4
12. Mr. John Butterfill (Bournemouth, West)

What recent representations he has received on his policy on business taxation. [130139]

The Financial Secretary to the Treasury (Mr. Stephen Timms)

We have received numerous representations from business, including the statement from the Institute of Directors that the Budget shows that the Government believe in the enterprise culture.

Mr. Butterfill

Does the Chancellor recollect his statement of 19 December 1998 that he intended to reduce business taxation? How does the Minister reconcile that with the CBI estimate that business taxation has increased by £5 billion a year for each of the past three years?

Mr. Timms

No, that is not right. We have set out our ambition to increase productivity faster than our main competitor states in order to close the productivity gap that opened up over a long period. We have set out a clear strategy for doing that, and the tax system has an important role to play in boosting productivity and improving competitiveness. Corporation tax rates are at their lowest ever and are the lowest in the industrialised world. On average, small companies have enjoyed a corporation tax cut of about 25 per cent.

Mr. Barry Sheerman (Huddersfield)

Is my hon. Friend aware that those of us who spend time with businesses in this country, including those in my constituency in west Yorkshire, find that business people say that this is the best time to be in business in terms of business taxation and the general business environment? They have one caveat: they are still worried about the value of the pound against the euro.

Mr. Timms

My hon. Friend is right. There are 1 million extra jobs in the economy since the election and 100,000 more small firms. We are creating a new culture of enterprise for all and our tax policies are a key element in that success.

Mr. Owen Paterson (North Shropshire)

The president of the CBI has clearly stated that the Government have imposed £5 billion of taxes on business. Will the Minister please name three businesses that have been made more competitive by that policy?

Mr. Timms

Small businesses have enjoyed an average corporation tax cut of 25 per cent. Let me tell the hon. Gentleman about another tax change that we have made: the new 10p starting rate for corporation tax has helped 270,000 small businesses—not three, but 270,000.