§ Lord Higginsasked Her Majesty's Government:
Further to the Written Answer by Lord McIntosh of Haringey on 22 July (WA 13), whether they accept that there is a difference between a correlation and a causal relationship; what evidence they have that there is a causal relationship between the change in ACT (advance corporation tax) made by the Chancellor of the Exchequer's first Budget and investment in industry; and what that relationship is. [HL5570]
§ Lord McIntosh of HaringeyThe abolition of Advance Corporation Tax was part of a package of reforms that included the abolition of payable tax credits on dividends and cuts in Corporation Tax rates. It is inappropriate to consider any of these elements in isolation, but it is not unreasonable to assume that the reforms have had a significant impact in increasing total business investment, as detailed in my Written Anwer on 22 July (WA 13).