Clause 54 - Charge and main rate for financial year 2002
Finance Bill
6:30 pm
Mr Richard Ottaway (Croydon South, Conservative)
I am grateful for your assistance and guidance, Mr. Hood.
On the face of it, the proposal is a planned announcement of the level of corporation tax levied on Britain's corporations. The Prime Minister repeatedly says that he is proud of the fact that he has reduced the headline level of corporation tax from 33 per cent. to 30 per cent. That appears to be a laudable claim; it is the sort of thing that Baroness Thatcher might be proud to say. But when one looks at the small print, and sees what is actually happening to the level of taxation on companies, the opposite is the case. The Chancellor's figures in table C7 on page 192 of the Red Book, show corporation tax rising by £5.7 billion from £32.1 billion in 2000-01 to £37.8 billion in 2001-02. The Chancellor could easily have chosen to moderate those vast increases by raising the corporation tax thresholds at least in line with inflation or by cutting other taxes for business, which is what the Government said they would do. The Labour party business manifesto in April 1997 stated:
``We will not impose burdensome regulations on business, because we understand that successful businesses must keep costs down''.
What absolute codswallop! What effort have the Government made to keep that pledge to the electorate? The manifesto continued:
``We will cut unnecessary red tape''.
In his speech at the Mansion House in February, the Secretary of State for Trade and Industry said:
``I guarantee that we will not allow regulation to stifle enterprise and innovation''.
At the annual dinner of the Confederation of British Industry, the Prime Minister said:
``Enterprise should be encouraged through a climate for business and a tax system which rewards success.''
The Chancellor was reported as saying that he wanted tax cuts for business, not tax rises.
The Government have singularly failed to keep any of those pledges; they have increased the burden on businesses and the level of taxation on companies. Members of the Committee need not take it from me, they can listen to the Confederation of British Industry—the voice of British industry. Commenting on the financial burdens that the Government have piled on business, Digby Jones, director general of the CBI said:
``Enough is enough. I really do say to the Government `no more'''.
What state have we reached when the director general of the CBI has to go to the Government and say ``Enough is enough'' after their pledges during the election campaign? Mr. Digby Jones also said:
``Ministers must do more to roll back the burden of business taxation, which has gone up £5 billion a year during this parliament''.
The CBI pre-Budget report submission complained of the
``hike in business taxation since 1997''.
It stated:
``We believe that several recent policy proposals are potentially damaging and must be amended.''
It is not only the CBI that holds those views. Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union said:
``We're not against taxation, but do you really hit business with new taxes when industry is already under pressure from the pound? Business should be treated more fairly.''
The Government are quiet when it comes to quotations like that from their own supporters. Those are the sorts of quotations that count, and the ones that they should be listening to. There is no doubt that the Government have done nothing but raise the levels of taxation and regulation on business. They cannot be proud of the burdens that British industry has to face today. It is a travesty for them to stand here quietly hoping that we would slip through the rise in corporation tax before 7 o'clock. The Minister should stand up and tell us what he is actually doing for business.