Clause 25 - Charge and main rate for financial year 2005

Finance Bill – in a Public Bill Committee at 10:15 am on 11th May 2004.

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Question proposed, That the clause stand part of the Bill.

Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary To the Treasury, Economic Affairs, Shadow Chief Secretary to the Treasury

A year ago, the main corporation rate for this year was set at 30 per cent. As I understand it, corporation tax bands are not changed, which in a sense means that the value is eroded with inflation. Does the Minister know whether the Government intend not to make any changes to corporation tax bands in future?

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

Much as I am tempted to make announcements for the Chancellor for future years, I shall not do so. However, the answer to the hon. Gentleman's question about whether we keep the competitive rate of corporation tax under review is yes. The Chancellor always seeks—in setting the headline rate on corporation tax, or the various allowances and interactions in the tax system—to ensure that our corporate tax system is highly competitive as it is and still one of the lowest in Europe. Our competitive advantage remains.

Photo of Mr John McWilliam Mr John McWilliam Labour, Blaydon

Order. I have to point out that the clause is about the year 2005 only and not about any other year.

Question put and agreed to.

Clause 25 ordered to stand part of the Bill.