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If the right hon. Gentleman can contain himself, I shall give way in a moment.
Since 1997, we have taken a number of steps to reform the business tax system and reward entrepreneurship, including cuts in corporation tax and the introduction of targeted measures such as research and development tax credits and measures to reduce the administrative burden of VAT. We have already cut long-term capital gains tax for business assets from 40p to 10p. This year, rates of corporation tax and capital gains tax will both remain frozen. To assist small businesses' cash flow and provide enhanced funding for new investment we have increased the first-year capital allowances for small business investment in plant and machinery from 40 to 50 per cent., and that increased allowance will be available for 12 months from April 2004.
The VAT threshold has been raised to £58,000, the most generous VAT threshold in Europe. In addition, up to 13,000 businesses will be eligible to benefit from simplified VAT accounting. From next year, in 2,000 enterprise areas, we will further increase the tax incentives to invest. To increase the incentive to invest in research and development, a new definition of research and development tax credits will come into effect on