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Surplus Target and Corporation Tax

Part of the debate – in the House of Commons at 4:27 pm on 4th July 2016.

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Photo of George Osborne George Osborne Chancellor of the Exchequer and First Secretary of State 4:27 pm, 4th July 2016

My hon. Friend is right to say that, while taxes on business profits are important, capital taxes are also vital to stimulating investment. That is why in the Budget we reduced capital gains tax—and, with hindsight, that is an even more sensible move than I thought it was at the time. I am always ready to consider further investment allowances, and we have very successful allowances such as the enterprise investment scheme. Of course, the balance has always got to be between simplification and simplicity of the tax system and new allowances, and sometimes people call on me in the same breath to do both things—not my hon. Friend, because he is very clear in his thinking. We have got those allowances, but reducing headline rates is generally the better approach.