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Clause 1 — Main rate of corporation tax for financial year 2011

Part of Finance Bill – in the House of Commons at 8:00 pm on 12th July 2010.

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Photo of Matthew Hancock Matthew Hancock Conservative, West Suffolk 8:00 pm, 12th July 2010

I shall keep this contribution extremely brief, given the hour. I was surprised by some of the arguments made by Opposition Members. I am not all that surprised that Stephen Timms, the shadow Minister, does not support amendment 21, which was moved by Chris Leslie, not least because before the election he said we would need any bank levy to be globally agreed. Indeed, the current shadow Chancellor, Mr Darling, said:

"Countries can't go it alone. It is very important that we do this internationally".

Conservatives and Liberal Democrats campaigned during the election for a unilateral bank levy, no matter what happened in the rest of the world, so it is not surprising that we do not listen to Opposition Members who argue that they are now in favour of one. They have performed a U-turn in an extremely short time.

Another point I want to make is that the shadow Minister said that his party's policy is that corporation tax should be the lowest in the G7, but Italy's corporation tax is now 27.5% and Canada's is set to be reduced to 27.2%, which means that Labour's policy is to reduce corporation tax, including on the banks, as he just confirmed, without the bank levy. A bank levy would more than offset the corporation tax reductions, so Labour Members are in all sorts of a tumble on this.

Everybody will note the difference between the Government, who argued before the election that we needed a unilateral bank levy and who are delivering it within seven weeks, and Labour Members, who argued that we should not have a bank levy, before performing a U-turn within 10 weeks.

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