Clause 32 - Corporation tax starting rate and fraction for financial year 2002

Part of Finance Bill – in a Public Bill Committee at 3:45 pm on 16th May 2002.

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Photo of Michael Jack Michael Jack Conservative, Fylde 3:45 pm, 16th May 2002

If I had been asking for detailed company-by-company information, I would entirely accept what the Paymaster General says. However, the idea that the Treasury cannot provide some rational explanation—[Interruption.] I am sorry, but I do not accept that. There must have been a way in which the Treasury decided that that, rather than other alternatives, was a good use of public money to achieve an as yet unstated policy objective.

The Government are very happy when they believe that they have the justification to put on record gains such as economic growth or an increase in employment. The Paymaster General cannot have her cake and eat it. The Government are happy to put in the public domain, when things are going their way, the gains that they think can be made. It is different when I ask her in this Room to give a compare-and-contrast analysis of why this method has been chosen. If she simply said that the Government wanted to

reduce the level of tax on that company, that would be fine; I would respect that point of view, but if there are alternative reasons, Parliament should hear them.

I do not think it unreasonable to ask whether alternative ways of helping small and medium-sized enterprises were considered. Any reduction in taxation will leave more money with those companies but, using the arguments that I put forward on deadweight costs, there might have been a better, more targeted—to use the Paymaster General's own language—and therefore more appropriate way of using that money.