§ Mr. AncramTo ask the Secretary of State for Wales if he will provide additional assistance to companies in Wales to relieve the effects of(a) changes in the exchange rate since 1 May 1997 and (b) changes to the ACT rules in July 1997. [33618]
§ Mr. HainNo. The Government recognise the difficulties for exporters and manufacturers affected by the strong pound and the effect on exchange rates and exports is a factor that the Bank of England takes into account in determining interest rates. The Government are committed to delivering a stable macro-economic framework in which businesses will be better able to plan for the long term.
458WThe abolition of payable tax credits in July 1997 removed a significant distortion from the tax system which encouraged companies to pay out profits as dividends rather than to retain them for investment. It was accompanied by 2 per cent. cuts in the main and the small companies' rates of corporation tax, backdated to 1 April 1997. These changes are for the long-term benefit of the UK economy, as so for companies in Wales.