Consolidated Fund (Apppropriation) Bill
Charlie Elphicke (Dover, Conservative)
I shall keep my remarks brief and discuss clause 1 in relation to corporation tax.
There are many pockets of deprivation in Dover and Deal, and the rise in child poverty during the previous Parliament was a serious concern, as was the widening of the gap between the richest and the least well-off. The abolition of the 10p rate hurt and upset many of my constituents, so the rise in income tax personal allowance is extremely welcome, but what we need to do, as has been much discussed today, is to increase the nation's trend growth rate.
On that point, I particularly welcome the reduction in corporation tax to what will be 24p by the end of this Parliament. That is incredibly important, because business, particularly international business, is very mobile and can set up anywhere. WPP, for example, has gone off to Dublin, and that should concern every Member, because the Exchequer is going to lose about £240 million in corporation tax receipts every year.
If we are to compete with centres in the European time zone, it is important also that we consider how to build in a participation exemption, as the Netherlands and Luxembourg have, and as Ireland and Switzerland have in effective forms. We need to draw international business into the UK, because that is a critical path towards expanding the amount of jobs and money that we have.
I make one brief plea. Reducing the corporation tax rate to 24p by the end of the Parliament is welcome, but, if we are to make a step change, reducing it to 19p would, in my respectful submission, be transformational. It would draw in international business and, ironically, raise corporation tax revenues. That is the international evidence, and that is the short and simple case that I put to the Treasury team-to consider going further, harder and deeper in future.