Our main rate of corporation tax is the lowest among the major industrialised countries and our small companies rate is one of the most competitive in the European Union. We have cut both by three percentage points since taking office. I am pleased to say that our new starting rate of 10 per cent., which was introduced this month specifically for small companies, is the lowest rate in the EU. About 270,000 companies will benefit from the starting rate. By means of that and other measures, we have established a stable, low-rate, competitive tax environment, in which business can thrive.
On behalf of the business community in my constituency of Hamilton, South, may I thank my right hon. Friend for his promotion of business-friendly policies. Does he agree with the director of the Institute of Directors who, the morning after the Budget, said that the Government were creating an enterprise culture in this country? Does he also agree that the Conservative Government's policy of increasing taxes, promoting boom-and-bust economics and amassing large debts created bad conditions for business?
I thank my hon. Friend for his welcome for the measures in the Budget. He is quite right: the Institute of Directors applauded the Budget for what it did to establish an enterprise culture. Those measures include our capital gains tax reforms, the lop tax rate, the shortening of the tapers, the help for unquoted companies and the promotion of employee share ownership, which we discussed earlier.
It was, indeed, a Budget for enterprise. It will foster stability, to replace the boom and bust that did so much damage under the Conservative Government.
Under this Government, business in this country has learned the hard way that, behind the headline rate of corporation tax, there is a barrage of stealth taxes. Why is the share of national income taken in business taxes in this country now twice what it is in Germany or France?
That is absolute nonsense, given all the charges that business in Germany and France has to pay. Instead of talking down this country and its achievements, Conservative Members should be praising the amount of European Union investment into this country. They should acknowledge that, thanks to the enterprise culture that the Government have fostered, inward investment into this country rose by 32 per cent. last year, and that the stock of inward investment in the United Kingdom has risen by 60 per cent. since the general election. Business has given the Labour Government a vote of confidence, in contrast with the economic failure of the previous Conservative Government.