Does my right hon. Friend agree that the responses which may well have come in congratulate the Government on establishing a single rate of inheritance tax? Will not this measure ensure that it will be much easier to pass on family businesses and retain those family businesses in operation for future generations?
My hon. Friend is right, but that was, of course, just one of the measures in the Budget. It will, as he said, enable family businesses to be passed on to future generations, which is a good thing. The Budget was widely welcomed. The CBI said:
This is the Budget we have been waiting for. It will help to maintain the momentum of Britain's economic recovery and should boost business confidence.
Is it not right that, because of the Budget, we now have one of the lowest rates of business taxation in the Western world? Is that not a major boost to companies wishing to invest here, to companies that are already here, and to the revenue?
My hon. Friend is right. We have one of the lowest rates of corporation tax in the Western world, and the small business rate of tax is at the lowest level ever. This should be a great magnet, bringing further inward investment into this country, and should be welcomed by everyone.
Has the Chancellor received representations on the business expansion scheme proposals, to the effect that it is wrong to provide a tax shelter for those who are the richest in society to enable them to set up rented accommodation, often to exploit those at the poorest end of society?
We have not received representations to that effect. The hon. Gentleman may be interested, and perhaps surprised, to hear that we have had some representations from people protesting because we have narrowed and limited the relief fund of the business expansion scheme. We did that because we wanted to concentrate on start-ups and small businesses. We think that it is well worth while extending the scheme to the private rented sector. We need more rented accommodation.
Do the Government not recognise that their own commissioned survey of the business expansion scheme has shown that it has relatively minor job creation effects, that it has tended to concentrate on low-risk, asset-based enterprises and not on high risk ventures, that it is largely based in the south-east, and that it has tended to transfer funds from the north to the south? In addition, it is being used as a tax haven rather than as an efficient way of channelling private investment into enterprise and wealth creation. Far from expanding it, should the Government not have changed it radically or even scrapped it?
The hon. Gentleman seems to be ignoring what I have just said. In many respects, we have narrowed the scheme. It is obvious from his question that he is unaware that we had a survey of the scheme done by Peat, Marwick, Mitchell and Co. which reached very different conclusions from those to which the hon. Gentleman referred. It s precisely because we think that the scheme should not he used to create asset-backed investments at the taxpayer's expense that we have narrowed its application to £½million small businesses. That will deal precisely with the point that the hon. Getleman raised and he should acknowledge that.