The CBI has welcomed the cuts in corporation tax that my right hon. Friend the Chancellor announced in this year's Budget. I remind the hon. Gentleman that, as a consequence of that and previous Budgets, we have the lowest rate of corporation tax in the history of the United Kingdom and the lowest rate of any major industrialised country in Europe—indeed, it is the lowest rate of any major industrialised country in the world. I would have thought that he would have welcomed that.
Does my right hon. Friend agree that, generally, the climate for business and industry after the Government's Budgets is far better? Does he agree that, overall, the future for our aerospace and steel industries is better? I remind him that, in the early 1980s, the Conservative Administration managed to get rid of more than 2.5 million manufacturing jobs. Has he the stomach to face an Opposition with such a record?
My hon. Friend is right. What business most dreads is a return to the years of Tory boom and bust, and a return to the conditions of the late 1980s and early 1990s, when 1 million manufacturing jobs were lost, inflation was in double figures and interest rates peaked at 15 per cent.
Whom should we believe about the effect of this year's Budget on the level of business taxation: the Chancellor, who said that the Budget offered tax cuts to business, or the British Chambers of Commerce, which says that taxes on business are up by £3.2 billion as a result of this year's Budget alone?
As he took part in the Budget debate, the shadow Chancellor should realise that we have not only cut corporation tax in the Budget—[Interruption.] We have reduced it to 30p, 20p and there is a new lop starting rate. In addition—it has been widely welcomed by not just the CBI, but other business organisations—we have introduced new research and development tax credits to help businesses to take forward new products and new services. We have also extended capital allowances to aid manufacturing and service-based industries. The Budget has been widely welcomed by business because it is good for business.
Does the Chief Secretary not realise how insulting it is to pretend that business taxes are coming down when every business man knows that they are going up? Corporation tax rates may be being reduced, but the amount of corporation tax that businesses are paying is going up. It is what they are paying that they mind about. That is going up, in breach of Labour's pledges.
Has the Chief Secretary not read the report from the Treasury Select Committee, which says:
the tax burden will increase during the coming financial year"?
Has he asked the Chairman of the Select Committee what he thinks about that? Can he not summon the ordinary decency to admit that taxes are rising under Labour by stealth and that Labour's clear pre-election pledge that there would be no increase in taxes at all was a cynical deception?
I am glad that the shadow Chancellor has finally conceded that we have cut the rate of corporation tax. That is welcome. Perhaps he would also concede that there is a fundamental difference between the Labour party and the Conservative party: we keep our tax promises, Conservative Members break theirs.
Has my right hon. Friend seen the recent study by Manchester business school, which shows that small businesses are 5.7 per cent. better off as a result of the Budget? Has he seen the reports in today's papers that 83 per cent. of City fund managers expect the economy to grow this year? Will he therefore ignore the snivellings of the Conservative party and continue to develop the small business service that was announced in the Budget, so that it provides a coherent framework and value-added services?
My hon. Friend is right. He is an expert on small business. He understands its needs. I am pleased that he recognises that this, too, was a Budget that recognised the needs of small businesses and will help them to prosper.