HC Deb 13 November 2003 vol 413 cc404-5
7. Bob Spink (Castle Point)

To ask the Chancellor of the Exchequer what plans he has for changes in the taxation of business. [138330]

The Paymaster General(Dawn Primarolo)

My right hon. Friend the Chancellor is considering representations on business tax, including corporation tax, and will make his pre-Budget statement in due course.

Bob Spink

Did the right hon. Lady read the CBI's comments about the 19 new business taxes in the previous Parliament and the decision to drive up national insurance contributions, which destroy business competitiveness and productivity? Last year, business investment fell by more than at any other time in the past decade. Will she undertake not to introduce the Government's proposed new taxes on businesses?

Dawn Primarolo

I am sure that the hon. Gentleman is fully aware of all the international comparisons with tax levels for businesses in the United Kingdom. He also knows that the Government have undertaken huge reform of the corporate tax regime to support businesses through provisions on intellectual property rights, the research and development tax credit and intangible assets as well as through lowering corporation tax for large and small companies. All the comparisons show that the United Kingdom is the best place in which to do business. Digby Jones, director general of the CBI, echoed that when he said:

I would much rather be doing business in Britain than anywhere else in Europe… We are still the most successful economy in Europe.

That shows that the Government's policies are correct.

Mr. Andrew Miller (Ellesmere Port and Neston)

Does my right hon. Friend agree that we need to encourage the vehicle industry to invest in future technologies, some of which have a long gestation period? Does she also agree that, as part of that, it is important that we show our commitment by continuing to give support to interim technologies?

Dawn Primarolo

I am sure that my hon. Friend is fully aware of the importance of the research and development tax credit for innovation in any industry, and that its extension to the small and medium-sized enterprises has been crucial in ensuring that those ideas continue to be funded and developed. We keep the R and D tax credit continually under review, and the definition of it has reduced the maximum expenditure necessary to qualify for that tax credit. I will continue to look closely at its operation, to ensure that industry is rewarded for innovation and development and that the tax system encourages that.

Mr. David Ruffley (Bury St. Edmunds):

Is the Minister aware that Digby Jones also said recently:

Ministers cannot keep siphoning off company funds without damaging investment, productivity and competitiveness. That will reduce the ability for the government to invest in public services—the money will simply not be there."?

Which part of that statement does the Minister not understand?

Dawn Primarolo

We are not siphoning off funds, as the hon. Gentleman puts it. [HoN. MEMBERS: "It was Digby Jones."' The Government, in whose consultations Digby Jones is an active participant, want to reform the tax system to support growth, encourage stability, create investment and jobs, allow our businesses to grow and maintain the competitiveness of the British economy. All those things are being done, with stability at the heart of them, and Digby Jones agrees with that.

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