Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 3:49 pm on 30th April 2002.

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Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury 3:49 pm, 30th April 2002

As I recall, the ratio is about 5 per cent. and is projected to go up gradually. As the hon. Gentleman well knows, the savings ratio reflects consumer confidence in their domestic financial position. One of the reasons why it went down was that consumers had more confidence and their household balance sheets were stronger than they had been in the years of boom and bust under the Conservatives, when they never knew what would happen to their financial circumstances.

We want to sustain and improve business investment and that is why in past Budgets we cut corporation tax from 33p to 30p, the lowest rate in our history. To encourage investment in the technologies of the future, clause 52 and schedule 12 extend an enhanced research and development tax credit to all companies. That means a £400 million boost for innovation and research in Britain.

To help companies restructure without key decisions being constrained by the tax system, clause 43 and schedule 8 set out an exemption for companies disposing of substantial shareholdings. That new relief forms part of the Government's commitment to reform and modernise the corporate tax regime, ensuring that the United Kingdom remains a good place in which to do business.

The Bill also sets out the new regime to provide relief for the cost of intangible assets, including intellectual property and goodwill. The new relief, details of which are set out in clause 83 and schedules 29 and 30, will encourage business to take advantage of opportunities in the knowledge-based economy. This is another important step in our programme of corporate tax reform.