The cuts in corporation tax for businesses right across the spectrum and the measures that I announced to improve companies' cash flow will provide considerable help for businesses. In total, the Budget gives over £¾ billion to businesses this year.
Does my right hon. Friend agree that the reaction of business to his Budget is summed up best by the Association of British Chambers of Commerce, which said, "We are delighted"? His measures on corporation tax and VAT will give added confidence to industry as inflation falls and business optimism grows.
I am grateful to my hon. Friend. I am not sure that I agree with him entirely, however. All the business representative organisations gave the Budget a warm welcome. The president of the CBI said that it was
a Budget for soundly based recovery, for saving and for investment".
The Institute of Directors said that it
addresses the immediate economic ills of business as part of an imaginative long-term fitness campaign".
Whatever Opposition Members may say, the Budget received a strong welcome from those who know about business.
I welcome the number of clauses in the Finance Bill that deal with business taxation. Is the Chancellor aware, however, that it is estimated that perhaps £2 billion of the amount that he will receive from corporation tax will be a tax on inflation? That will seriously affect the cash flow of a number of companies. Cannot the Chancellor take further action to help companies at serious times?
The right hon. Gentleman seems to be suggesting that we should bring back stock relief—that we should adjust the tax system to accommodate inflation. I do not agree with that approach; I think that the correct policy is to reduce inflation.
Does my right hon. Friend accept that the swingeing increase in excise duty on fuel is highly inflationary and very damaging to a vital part of our economy—the hauliers? All goods need to be taken from the point of production to the point of use.
The amount that the Chancellor is giving business by way of reductions in corporation tax may well be more than offset by the increases in the uniform business rate, which takes account not only of inflation and the phasing out of transitional relief, but of the revaluation which has hoisted rates throughout the country.
The hon. Member for Bolsover (Mr. Skinner) has made another significant intervention from a sedentary position. Hon. Members have always wondered what made him so malicious and malign—we now realise that he has a deep-seated problem.
My hon. Friend the Member for Macclesfield (Mr. Winterton)—[HON. MEMBERS: "Hear hear!"]—should consider the increase in excise duties alongside the freeze in vehicle excise duty at the same time, which means that the increase in transport taxes is very much less than my hon. Friend said.
As the hon. Gentleman knows, the increase in unemployment reflects activity over many months and unemployment figures lag behind the general performance of the economy. I am still confident that, as I predicted in my Budget speech, we shall see an upturn in the second half of this year.
Does my right hon. Friend take pride in the fact that the reduction in corporation tax and the carry-back of losses announced in this year's Budget have greatly assisted companies to weather the recession?
I very much agree with that. As I said, that was the reaction of the main organisations that represent businesses. I believe that the Budget was well received by business generally.