The Government’s aim is to create the most competitive tax system in the G20. The corporate tax road map sets out a series of reforms in a single programme to give certainty to business, including by reducing the main rate of corporation tax to 23% by 2014. Where appropriate, the Government provide tax reliefs to support specific sectors of the economy, but simplicity is a key characteristic of a competitive tax system.
I am grateful for that answer. One of the biggest employers in my constituency is Drayton Manor park, home of Thomas Land, and one of the greatest challenges that it faces is the lower rate of VAT levied on the leisure sector in our continental competitor countries. Has the Minister examined the case for lower VAT for the leisure sector in this country, and if he has not—I appreciate the bust that we inherited—what measures is he taking to make the industry more competitive?
We continue to look at VAT in the leisure and other specific sectors but we have to be careful to keep the tax system as simple as possible and we have to bear it in mind that such measures can simply move spending from one area to another. Furthermore, as my hon. Friend points out, we have to ensure that the public finances are in a sound state. I am sure that I remember reading one “Thomas the Tank Engine” story in which the big, unpopular engine Gordon went off the tracks. We do not want a repeat of that.
The Exchequer Secretary will be aware that consumption is a major part of the economy. Given that in recent days we have seen news that retail figures have been poor and the CBI has said that retail stores are laying off people at the fastest rate for two years, why will he not consider a temporary VAT cut to boost demand and get the economy moving again?
Returning to the fundamental question, the difficulty is that if we do not have credibility in the public finances and if interest rates rise, it will do nothing for consumption. We have to get control of the deficit, get borrowing down and stick to the path. We cannot grow money off the money tree, which, I am afraid, seems to be the Labour party’s policy.