§ Mrs. Jane KennedyTo ask the Chancellor of the Exchequer if he will make a statement on fiscal incentives to encourage capital investment in(a) the United Kingdom and (b) other Organisation for Economic Co-operation and Development countries, and on the levels achieved in each case in the last three financial years. [4877]
§ Mr. JackThe Government believe that the best way to encourage capital investment in the UK is by low taxation, low inflation and stable economic policies, not by fiscal incentives. The Government have achieved considerable success in improving the climate for investment by reforming the corporation tax system to bring capital allowances more into line with actual depreciation and by cutting the rate of corporation tax from 52 per cent. to 33 per cent. The level of business investment in the UK as a proportion of GDP is comparable with our major competitors and it is now higher than in the 1970s. International statistics of business investment are available in the OECD business sector database.