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Mr. Maude : This has been a delightfully ecumenical debate, with everyone agreeing that clause 77 is a splendid measure to introduce into the Bill. It is slightly remarkable that the hon. Members for Newcastle upon Tyne, East (Mr. Brown) and for Berwick-upon-Tweed (Mr. Beith) claim to have known about the abuse for some time, and have been clamouring to legislate against it year after year. They give the impression that, when the 1981 change was made, the loophole was transparently clear, and that it should have been closed then. History shows otherwise.
Mr. Nicholas Brown : I do not claim that the loophole was transparently obvious in 1981--at least, not to me. I became aware of it after reading Mr. Tutt's book in 1987--just at the time that I joined the shadow Treasury team. I may add that it is not I but the Government who are
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professionally advised, and who have available to them, year after year, the opinions of the Inland Revenue. When did the Revenue first draw the abuse to the attention of Ministers ? I bet that it was in 1981.Mr. Maude : The reality is that no new clause or amendment to deal with the loophole was introduced until 1990. In that year, a new clause, to which the hon. Member for Newcastle upon Tyne, East, referred, was tabled but not selected. On that occasion, my right hon. Friend who is now the Patronage Secretary did not refer specifically to the loophole, because the burden of his plaint in that debate concerned dual resident companies, not non-resident trusts. He referred to it only obliquely and in passing, which did not become a serious problem until recently. However, it is now being dealt with expeditiously and thoroughly, as has been acknowledged. I have some sympathy with my hon. Friend the Member for Beaconsfield (Mr. Smith), who made it clear that the higher the rate of tax, the more attempts there will be made to avoid it--and the more strenuous the tax authorities will need to be in preventing avoidance. That analysis is exactly correct. Members of the Oppostion Front Bench are nodding wisely and sagely, and appear to be agreeing with all that I say--but the points that I reiterate have not made much impact on the Labour party before now.
Mr. Nicholas Brown : I always smile, in my genial, good-natured way. That is not something that has been brought on by the present Financial Secretary, because I exhibited the same behaviour to the last three Financial Secretaries that it has been my pleasure to know. I will accept entirely the Financial Secretary's assurance that the Government acted as expeditiously as possible, but only if he will reveal when the risk that the 1981 change would be used for tax avoidance was first brought to the attention of the Government by their professional advisers--specifically, the Inland Revenue.
Mr. Maude : I do not intend to tell the hon. Gentleman what advice I or my predecessors were given by our official advisers--any more than the hon. Gentleman or any of his predecessors who were Ministers in previous Labour Governments would do. I am sorry to disappoint the hon. Gentleman, but, on mature reflection, I am sure that he will understand.
Mr. Brazier : He will get over it.
Mr. Maude : As my hon. Friend says, the hon. Member for Newcastle upon Tyne, East, will master his disappointment.
The hon. Gentleman referred to the mystery of the decimal point. Labour's standard approach is to multiply by 10 the estimated yield from a tax change, but to divide by 10 the cost of a public expenditure commitment. In reality, the measure--the hon. Member for Berwick-upon-Tweed had it right-- will prevent a tax loss to the Revenue of about £100 million. It is not possible to be precise, but it will produce a yield this financial year of about £10 million, and in a full year of £15 million. There is no great pot of gold that the hon. Member for Newcastle upon Tyne, East can use to finance Labour's spendthrift policies.
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Mr. Arbuthnot : Does my hon. Friend agree that, in view of the fact that the measure will stop a loophole, it will change people's behaviour and that there is no predicting the amount of revenue that can be produced? In a sense, it is a misnomer to talk about the revenue that might come from it.
Mr. Maude : My hon. Friend is entirely right. All one can do in such circumstances is to estimate to the best of one's ability on the basis of accumulated experience and the Inland Revenue what the yield might be from these changes. Behaviour will change as a result of the proposals, but the best estimate is that there will be a modest yield from transactions that will take place.
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This is one part of a three-part approach which is a considerably tougher and more extensive approach to the problem than that recommended by the hon. Member for Newcastle upon Tyne, East. It will be effective. The hon. Gentleman asked why we should not spread the effect on beneficiaries more widely so that more settlements would be caught. That is the subject of a subsequent debate on amendments to be tabled by the Liberal Democrats. We can explore it then, and I shall explain on that occasion the reason for the approach that we have adopted.
Question put and agreed to.
Clause 77 ordered to stand part of the Bill.
Schedule 14
Settlements : settlors
Mr. Beith : I beg to move amendment No. 3, in page 129, line 26, leave out child' and insert descendant'.
The Temporary Chairman : With this it will be convenient to take the following amendments : No. 4, in page 129, line 27, leave out child' and insert descendant'.
No. 6, in page 129, line 36, leave out child' and insert descendant'.
No. 5, in page 129, line 36, leave out stepchild' and insert step- descendant'.
No. 10, in page 133, line 10, leave out child' and insert "descendant'.
No. 11, in page 133, line 11, leave out child' and insert descendant'.
No. 12, in page 133, line 20, leave out child' and insert descendant'.
No. 13, in page 133, line 20, leave out stepchild' and insert step- descendant'.
Mr. Beith : The effect of this group of amendments would be to make the settlor potentially liable to tax if any descendant--not just the child --was a beneficiary. There is no obvious reason why the settlors should not be liable to tax on settlements made for the benefit of their grandchildren. The Minister referred to the possibility that a much wider limitation could be placed on overseas trusts affecting other potential beneficiaries. Perhaps he will be able to adduce particular reasons why that should not be so because of the other purpose for which trusts have traditionally been used. I do not see why a trust from which benefits for children are not tax-exempt should provide such an exemption in respect of grandchildren.
Mr. Maude : That is the point raised by the hon. Member for Newcastle upon Tyne, East (Mr. Brown).
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From the temperate way in which the hon. Member for Berwick upon Tweed (Mr. Beith) moved the amendment, I deduce that he accepts that it is no great point of principle. I concede that, if this were the only part of the proposal--if clause 77 stood on its own without the exit charge and without the supplementary charge on settlements that are not caught by these proposals--there would be a case for extending the net a bit wider.However, one must recognise that settlements are made in non-resident trusts for perfectly legitimate reasons which have nothing to do with tax avoidance. The burden of the amendment is to prevent tax avoidance and to bring transactions within the charge of tax where they should properly be subject to tax. Our judgment was that it was legitimate to restrict the ambit of this charge--the charge to the settlor--to settlements of which the beneficiaries were the settlor's immediate family, drawn not all that closely, and extending, of course, to companies that the settlor's immediate family controls and to the immediate family itself.
As the hon. Gentleman knows, that is considerably wider than the corresponding definition for resident trusts, but we believe that it is necessary that it should be wider if an effective charge is to be imposed on those who settle assets abroad from which they or their family can derive benefit. The balance that we have struck is about right. It is a matter not of principle but of judgment as to where one strikes the balance. The gains of non-resident trusts where only grandchildren or remoter issue have an interest will continue to be within the existing provisions, which tax beneficiaries who receive capital payments from the trustees. They will be subject to the supplementary charge which, as I have said, is another important element in the new package and which will apply where appropriate. In addition, we are strengthening the existing provisions to ensure that capital payments are chargeable when they are received by United Kingdom beneficiaries. We shall keep these measures under review, and we shall not hesitate to take further measures if they are thought appropriate. In the current circumstances, we have struck the correct balance.
Mr. Beith : I hope that the Minister will keep the amendments under review because it seems that he has not convinced even himself that the boundary line has been drawn in the right place. Grandchildren are among the most likely beneficiaries of someone who has made a great deal of money in his lifetime and who is looking for tax avoidance routes to keep it within the family and not pay tax in the process. It is a normal transfer from grandparent to grandchild. I shall not press the matter tonight, but I hope the Minister will keep it under review. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn .
Mr. Beith : I beg to move amendment No. 9, in page 132, line 28, leave out four' and insert five'.
The Temporary Chairman : With this it will be convenient to take the following amendments : No. 8, in page 132, line 28, leave out (6)' and insert (6A)'.
No. 7, in page 133, line 7, at end insert--
(6A) The fifth condition is that a person falling within sub-paragraph (7)(a) or (b) below is a person who will or might benefit from the settlement.'.
Mr. Beith : I shall describe the effect of the amendment in detail. Under the Bill as drafted, settlors of pre-Budget
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settlements are in general caught only if the settlement is subsequently added to, varied or transferred out of the United Kingdom. If the settlors themselves are beneficiaries, there is a strong case for saying that they should be taxed on trusts that already exist in so far as those trusts give rise to income from now on.The issue was raised as a result of a great deal of publicity given to some large trusts to which the hon. Member for Newcastle upon Tyne, East (Mr. Brown) referred. The public desire to see something done about it, and they will not be satisfied if those large trusts escape the ambit of the clause.
One must draw a careful line on retrospection. I have argued on many Finance Bills against the use of retrospection to create tax liability where one did not exist at the time. My argument now is not based on the creation of a new tax liability for income derived before the Budget. The purpose of the amendments is to deal with tax liability which will arise from now on, and of course, because of the nature of what we are discussing, they will effectively change the timing of tax payments. There are a number of precedents for going about it in this way, including the Inheritance Act 1974, which meant that discretionary trusts set up before 1974 became liable for subsequent inheritance tax.
One must ask whether people should have a permanent tax holiday merely because they were able to exploit a loophole before it was cleared up. Investors in overseas trusts would have been advised that the loophole was likely to be closed in the future. Those people often received advice from fairly sophisticated tax advisers. There is a similar element of retrospection in schedule 15, which proposes a charge of 10 per cent. a year on the tax liability of pre-Budget settlements. The Government also accept that it might be a legitimate device to use to ensure that the income from now on of some of the settlements made before the Budget was made liable to tax.
Mr. Maude : I am keen to understand what the hon. Gentleman proposes. He talks about income from the trusts, which is a little puzzling. I can see that it would not be retrospection to say that income from a certain date should become liable for tax, and if one announced that from a date that was to be the case that could happen. A capital gain is a different matter. If a capital gain was realised today, for example, there might be a capital gain over a period right back to the rebasing in 1982.
I am not clear whether the hon. Gentleman proposes that the whole of that capital gain, going back beyond Budget day and the announcement of the proposals, should be subject to tax, or whether he proposes that it should be simply the part of the capital gain which has accrued since Budget day. If he proposes the former, that seems clearly--
The Temporary Chairman : Order. This is a very long intervention.
Mr. Maude : Perhaps I may draw to my peroration, Mr. Knox, and finish the point, which was meant to be short, although now I am afraid that I am in danger of having forgotten what it is. Either the proposal would be retrospective if it were to bring into charge for tax all the capital gain from whenever it began to accrue, or it would simply apply to the part of
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the capital gain which accrued since Budget day, in which case it would impose an impossible task of valuation of all assets in all non-resident trusts on Budget day.Mr. Beith : I sought to advance the principle--which was rightly picked up by the Minister in his pertinent if lengthy
intervention--that we should not give non-resident trusts a permanent tax holiday, but that we should avoid if we can introducing further dangerous precedents of retrospection to add to those in which the Government have engaged in previous Bills and elsewhere in the Bill. The clause about building societies is an example. I am trying to draw a line at the point of the Budget itself, and to move on from there. The Minister has made the perfectly legitimate objection that valuation problems are associated with that, and he may want to deal with that later.
I hope that the Minister will address himself to the central issue, which is that my concern was based on the large sums that have already been put into non-resident trusts. Those trusts will enjoy a permanent tax holiday if the Bill is not amended along the lines that I have proposed. There is a case for an amendment which does not create a retrospective tax liability going back before the Budget but which taxes such trusts in the future, leaving those who would otherwise benefit from them the opportunity of either paying the tax or transferring the assets to some other instrument.
Mr. Maude : I will endeavour to keep my speech shorter than my intervention. I appreciate that the point made by the hon. Member for Berwick-upon-Tweed (Mr. Beith) is serious. His concern is that there should not be a permanent tax holiday for existing trusts. I must make two points. First, a non-resident trust already set up under previous arrangements will have to remain untouched--no further beneficiaries added to it and no further funds added to it--for it to remain not subject to the charge introduced by clause 77. If no such changes are made, such trusts do not enjoy a permanent tax holiday if at any time the capital is repatriated to the United Kingdom. At the point at which the capital is delivered to a United Kingdom resident beneficiary, it will be subject not only to ordinary capital gains tax, but to the supplementary charge that we are also introducing which is specifically defined to reflect the lost value to the Exchequer of the deferment of that capital gains tax.
It is not possible to bring existing unchanged non-resident trusts within the new charge on the settlor without either being retrospective by imposing tax on gains that may have begun to accrue some time before Budget day or imposing on the Inland Revenue a gargantuan task of valuation which I am sure that the hon. Member for Berwick-upon-Tweed accepts would be hugely difficult. It would require a valuation on 19 March, or whatever the date of the Budget, of all the assets in all resident trusts so that one knew the base from which the capital gain was being calculated. That is not a terribly practical proposition.
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8.15 pmI do not believe that we are perpetuating a tax holiday. At the point when capital is repatriated, the gains will be subject not only to ordinary capital gains tax, but to the supplementary charge which is designed specifically for that purpose.
Mr. Beith : I am grateful to the Minister for considering the proposal. I will reflect on his point about valuation. I am touched that the Government are now worried about gargantuan valuation commitments placed on the Inland Revenue, especially when I consider the council tax, which will have precisely that effect. I will reflect on what the Minister has said and see whether either in this context or in the context of the charge at the stage of repatriation to which the Minister referred the point could be pursued later. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That this schedule be the Fourteenth schedule to the Bill.
Mr. Arbuthnot : The Country Landowners Association, whose taxation sub-committee I have the pleasure to serve, has raised some points with my right hon. Friend the Chancellor. I hesitate to raise them in detail at this stage, but I would like to run quickly through them in the hope that my hon. Friend the Minister will write to me about them afterwards. I do not ask my hon. Friend for a detailed reply at this stage.
The points raised by the Country Landowners Association mainly concern the question of what happens to a settlement that was made before 19 March 1991 which becomes subject to the regime set out in clause 77. The conditions on which a pre-19 March settlement becomes a qualifying settlement are quite complicated. They are set out in paragraph 11.
The first condition in paragraph 11(3) is :
"on or after 19th March 1991 property is provided directly or indirectly for the purposes of the settlement--
(a) otherwise than by way of a bargain made at arm's length". Certain minor activities could make the entire settlement a qualifying settlement. In certain circumstances, if one simply added a first-class postage stamp to the settlement, one could make the entire settlement a qualifying one. There is an argument to suggest that only the new property which is added to a settlement after 19 March should be treated as a qualifying settlement rather than property that existed in the settlement beforehand.
The second condition that would mean that a pre-19 March 1991 settlement became a qualifying settlement is that the trustees of the settlement become non-resident after 19 March 1991. That could cause some difficulties unless the settlor himself has power to appoint or to reappoint the trustees. If he has no such power and if he has no say over who the trustees are, yet nevertheless becomes liable for capital gains tax on the settlement, that could cause some unfairness in some cases. I hope that my hon. Friend will look at that point and will come back to me on it.
The third condition is that a pre-19 March 1991 settlement can become a qualified settlement if there is a variation of the settlement after 19 March 1991. There are circumstances in which settlements might be varied-- for example, a foreign court might vary a settlement. Those are circumstances over which the settlor would have no control and which could result in unfairness.
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I ask my hon. Friend the Minister to write at some stage about these matters. I did not give him any warning that I would raise them this evening.The idea is that a settlor should pay the capital gains tax in a qualifying settlement subject to his right to reimbursement from the trust. If a pre- 19 March 1991 settlement becomes a qualifying settlement and therefore gives rise to a liability, would it be possible to have a revaluation of the assets at market value at the time when the settlement enters the regime of schedule 14? That would relieve the settlor of any gains or losses on any non-qualifying period.
I apologise for boring the Committee with these detailed and technical matters. I ask my hon. Friend the Minister to write at some stage, and hope that he will do so in the not-too-distant future.
Mr. Maude : The Committee will be disappointed that my hon. Friend the Member for Wanstead and Woodford (Mr. Arbuthnot) has given me a let-out by inviting me to write to him rather than entertain the Committee by responding to the important matters that he has brought to our attention which I shall consider carefully.
We have carefully framed the proposals by which the new charge will apply to existing trusts in particular circumstances to avoid any element of retrospection. If I am right, it is broadly the possible, potential retrospection, if such a concept exists, which is troubling my hon. Friend. That is that an element of retrospection could be triggered other than by the deliberate and conscious act of the settlor or the trustees.
Mr. Arbuthnot : It is partly that and partly that some settlors will have been locked into certain arrangements from which they are unable to withdraw. It is because they are locked into certain arrangements that they find themselves liable to an entirely unexpected tax liability.
Mr. Maude : I understand what my hon. Friend says. Broadly, the settlor should, I would guess, always have the power not to add funds to the trust and hence not to trigger the pre-existing trust into becoming a qualifying one. If there are circumstances that could trigger the pre- existing trust other than that, we shall need to examine them carefully.
My hon. Friend said that there could be circumstances in which the settlor might have no power over the appointment of trustees, where a non-resident trustee might be appointed and thus trigger the settlement into becoming qualifying. It would be an odd appointment. It would be an odd decision for whoever had the power to make the appointment to act in that way in the knowledge that it would bring such a trust within the new regime, if it were possible in the circumstances that my hon. Friend outlined to avoid making such an appointment.
My hon. Friend talked of the power of a foreign court to amend the terms of a trust. I cannot comment on that now. It is a matter to which I shall give careful attention.
My note of my hon. Friend's following point came to an end after I had written "valuation". I cannot remember in more detail what it was, but I shall be glad to deal with it when I have had the benefit of refreshing my memory by reading Hansard.
Question put and agreed to.
Schedule 14 agreed to.
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Clause 23
Charge and rate of corporation tax for 1991
Question proposed, That the clause stand part of the Bill.
Mr. Chris Smith : The clause sets the rate of corporation tax prospectively for the financial year 1991-92. Our debate on clause 22 of an hour or so ago related to the rate of corporation tax which was being set retrospectively for 1990-91. We are glad that the Government are reverting in clause 23 to the principle of avoiding retrospection in setting the rate of corporation tax. It may be conceded that there is merit in retrospection in exceptional circumstances in terms of clause 22, but as a general principle it must be right that the rate of corporation tax should be set prospectively rather than retrospectively. It was one of the relatively few wise changes to the taxation system that the right hon. Member for Blaby (Mr. Lawson) made when he was Chancellor of the Exchequer.
Many of our arguments about clause 23 are precisely the same as those that we advanced a short while ago when considering clause 22. We welcome the relief that is given to many businesses by the reduction in the rate of corporation tax to 33 per cent. We must recognise, however, that the benefit is not felt substantially by smaller companies. We shall come on shortly to talk about the measures that the Government are proposing for small businesses. There will be no benefit whatsoever for companies which have profits of less than £200,000, so we are talking of a limited but welcome measure.
It must be recognised that the benefit that is brought by the clause is substantially outweighed in the relief that it gives by other measures contained in the Budget and the Bill. We must understand the impact on business of the rise in value added tax to 17.5 per cent. Many business commentators have noted perceptively that, while the rate of corporation tax gives businesses something, the rise in VAT takes something away from them. In current circumstances it is difficult for many manufacturers to increase the prices of their goods fully to reflect the additional 2.5 per cent. I notice in passing that the Liberal Democrats have, perhaps temporarily, absented themselves from our company during these proceedings in Committee. I am surprised at that, given the importance of the clause that we are discussing.
The impact of the VAT change and its outweighing of the corporation tax measures has been commented upon in some surprising quarters. The National Federation of Self-Employed and Small Businesses Ltd., while giving a general welcome to the Budget, had one or two rather perceptive comments to make. The regional liaison officer for Yorkshire said :
"The really small guy is not selling at the moment and the VAT increase will push his prices up even more."
The regional chairman for East Anglia said about the Budget : "It's like the curate's egg, good in parts. The Chancellor has juggled with figures and not helped the cash flow problems of small businesses."
It was precisely the changes to corporation tax in clauses 22 and 23 which were supposed to help with the cash flow problems of business. But clearly many business men and business women do not believe that that has happened.
Another commentator on the Bill, Coopers and Lybrand, said immediately after the Budget :
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"Most entrepreneurs are not going to believe current competition will allow them to increase prices immediately to this extent they may well consider most of these measures"--that is most of the measures on corporation tax--
"are marginal to their cash flow problems in the face of the 2.5 per cent. increase in VAT and its consequences".
At about the same time Phillips and Drew said :
"Although the reliefs on business taxation were welcome, they amount to no more than a teaspoon with which to hold back the recessionary tide."
8.30 pm
It is clear from the comments of many observers on the Bill and the measures which were supposed to help business that, while the Government's measures are welcome to a certain extent, they will not do much to help business in a real way. The verdict of Phillips and Drew that the measures will do little to stem the tide of recession will form much of the focus of our analysis of the Bill in Committee.
On clause 22 we said that the Government would have done much better to have targeted the help that they decided to give to business in order to boost investment in manufacturing industry. Precisely the same analysis applies to clause 23. In clause 22, the Government decided to allocate £380 million worth of Exchequer moneys to the relief that they provided in last year's corporation tax rate. In clause 23 they have decided to give extra relief amounting to £830 million in a full year.
Earlier the Government asked us what the Labour party's proposals would cost. Our answer is simple. The Government are spending a substantial amount in this clause on supposed support for business in the current financial year. We would have made different choices about how to spend that money. We believe that it could have been better targeted, produced better results and assisted more with the recovery that our economy needs.
Mr. Arbuthnot : Given the choice, would the Labour party reverse this decision ? Given the choice, would it take us back to the 52 per cent. rate of corporation tax which applied when the Labour party was last in power ?
Mr. Smith : I do not know whether the hon. Gentleman was present during our earlier debate. If he had been, he would have known precisely the answer to those questions. The answer to both questions is no. If the hon. Gentleman went on to ask how the Labour party would finance its proposals on capital allowances if we kept the rate of corporation tax envisaged in the clause, I would make one simple point to him. It is a point which Ministers and Back-Bench Conservative Members have failed to recognise about our proposals on capital allowances. We are talking about bringing forward capital allowance moneys for companies. It is money which the Exchequer would have forgone anyway in due course. We are talking about bringing the money forward into an earlier stage of the investment cycle to provide an incentive for the investment. It is not money that is forgone in the long term by the Exchequer. I hope that the hon. Gentleman understands that extremely important point.
The Opposition have recognised the absolute need to ensure that industry is encouraged to invest. At present our investment performance is sadly lacking. We have identified that as one of the cardinal problems afflicting the
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British economy and we believe that, welcome though the Government's measures may be to some companies, they are not enough to stimulate the investment that our country needs.The firm of Rathbones prepared an extremely good analysis of many of the proposals in the Budget. It could hardly be said to be in the pocket of the Labour party. It made some interesting comments on the role of business taxation and the measures in the Budget, especially those which deal with corporation tax. It noted that there was a danger that small companies would face a disincentive to invest because of the way in which the thresholds and ceilings were set. On page 11 of its Budget briefing it says :
"In addition, the Chancellor has yet again ignored the calls to give specific reliefs for manufacturing industry. Presumably he feels that we are now a nation of service companies if not shopkeepers rather than manufacturers."
That was not the Labour party speaking. It was a firm commenting independently on the stance that the Government have taken in the Budget and the Finance Bill. It is not a stance that the Labour party shares. We believe that the cardinal need at present is to improve our investment performance in the manufacturing sector. Of course, we welcome the reduction in corporation tax this year to 33 per cent. But we cannot possibly agree with the Government's refusal to understand that allowances to boost investment are what our economy needs and what the Government should have considered more carefully.
Mr. Mellor : Having spent--perhaps one should say misspent--many years hacking around this place through great long Bills, many full of impenetrable verbiage, it is rather a treat to discuss a clause that states with great simplicity :
"Corporation tax shall be charged for the financial year 1991 at the rate of 33 per cent."
While others may spring to instantaneous understanding of even the densest clauses of Bills, I usually have to look to my crib. But on this occasion the imposing piece of paper headed "Board of Inland Revenue", which is usually my guide, simply says :
"This clause sets the rate of corporation tax for the financial year 1991 at 33 per cent."
Whatever other reservations may have been expressed about the Bill and, referring to an earlier debate, whatever problems of draftsmanship we may find when we go through the Bill in Committee--it is always a brave man who claims that any Bill that he has introduced is devoid of mistakes--clause 23 should at least win the prize for crispness and clarity. It makes clear what we are talking about, which is a start, even if we do not draw the same conclusions from it. Tempting though it is, I shall not repeat to the vast assemblage gathered for this purpose the comments that I made earlier. I should not wish to divert my constituent, Mr. Knox, whose rise to power is much appreciated by his Member of Parliament. I shall require him to read my earlier comments in Hansard.
Plainly, there is a philosophical difference between the hon. Member for Islington, South and Finsbury (Mr. Smith) and I. I do not necessarily think that it is the end of the world if other people do not agree--it is a perfectly reasonable thing for people to fall out about--but we believe that companies, possessed of the liquidity, can better decide what to do with the money. I gave the figures for the tremendous upsurge in investment in the 1980s, and the upsurge between 1986 and 1989 had much to do with the changes that my right hon. Friend the Member for
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