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Mr. Malcolm Bruce: There is a lack of transparency.

Mr. Robinson: The hon. Gentleman may say that, but all the figures were published not only in the Red Book but in the pre-Budget statement in November, when we set out clearly, for consultative purposes, our plans for advance corporation tax. I refer the hon. Gentleman to section 9 on page 19 of that consultative document, issued by the Inland Revenue on 25 November 1997. I also point out that the figures in that document were higher than those subsequently published in the Red Book.

The hon. Member for Grantham and Stamford(Mr. Davies), who has not been on top form this afternoon, said that there was something surreptitious or covert about the introduction of this legislation; but that could not be wider of the mark. We not only consulted but gave the figures on which we would consult so that there would be no lack of transparency and no misunderstanding. We reached broad agreement on that proposal.

Mr. Lilley rose--

Mr. Quentin Davies rose--

Mr. Robinson: I shall give way first to the right hon. Member for Hitchin and Harpenden, and then to the hon. Member for Grantham and Stamford.

Mr. Lilley: If the Paymaster General is being open and transparent, will he confirm here and now, on the record, that the net cash raised for the Treasury over the next four

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years--the lifetime of this Parliament--as a result of the clause will be just over £5 billion? Or he is trying, like his colleagues, to slip out of putting that on the record?

Mr. Robinson: The right hon. Gentleman is being nothing short of ridiculous. We published higher figures for the cash flow impact in the transitional period. There is bound to be a cash flow impact when moving from the present system of advance corporation tax to an instalment system. We made that clear and did not try to dodge the issue. We discussed the matter with the CBI and industry, and with international as well as domestic companies. They could see that it was a principled reform with inevitable consequences in the transitional period. They understood that we had a long-term interest in stability and low taxation rates and that reducing the rate of corporation tax for large companies and small companies to 30 per cent. and 20 per cent. respectively--the lowest figures ever--would have a major net present value to the companies. That is why we have had considerable support for our proposals.

Mr. Davies: My complaint was not that the figures were not published in the Treasury's document--I said in my speech that they were in the Red Book, which I quoted--but that although the figures were there for those who wanted to find them, the Government, and not only the Paymaster General, were disingenuously pretending that the effect of the Budget was to relieve the corporate sector of part of the existing burden of taxation when the reality was the exact reverse. My complaint was not about the figures in the Treasury's document, but about the deceptive spin put on them by the hon. Gentleman and his colleagues.

Mr. Robinson: The hon. Gentleman misses the point. Not only did we try not to present the measure in that way, but we consulted on figures that clearly showed what the transitional impact would be. One could not be more straightforward or transparent than that.

Mr. Lilley: The Paymaster General could be more straightforward and transparent and not dodge the question. Is it correct that the extra tax raised as a result of the clause will be £5.1 billion over the next four years? Is that true or false? Will he confirm that? Why is he dodging the question? Why is he refusing to put that answer on the record?

Mr. Robinson: Even the right hon. Gentleman can read. He can read the Red Book, just as everyone else can--although he may not know the difference between cash flow and tax. To be precise, this is not a tax. The taxes are being reduced and the cash flow impact is negative. We made the effect clear back in November. That gives the lie also to Conservative Members' claim that the two parts of the major corporate tax reform were not seen as a whole.

Mr. Lilley rose--

Mr. Robinson: I shall not give way again because the right hon. Gentleman will only repeat, ad nauseam, the silly little point that he is trying to make. He knows that it is a silly little point and he knows that the figures were published and consulted on. He hates the fact that we have

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the CBI's agreement for the measure and that our relations with industry are very good, and much better than those of the Conservatives in opposition or in government, but he must accept that. The right hon. Gentleman should be aware that the director general of the CBI wrote praising us for the fact that we had consulted and that we had removed medium companies from the instalment systems and made other adjustments.

The director general is clear that the principles of the reforms are accepted and supported by the large majority of companies in this country. That is what the right hon. Gentleman hates, but I regret to tell him that the Opposition have to learn that the Government--as we will discuss later when we come to individual savings accounts and other matters--are prepared to consult, to listen and to change policy, as we have done. That is nothing of which we should be afraid or ashamed. We recommend that the Opposition learn from that. Had they behaved more properly in that respect when they were in government, they would not have suffered such a disastrous defeat.

Mr. Quentin Davies: Will the Paymaster General give way?

Mr. Robinson: I have given way several times. I shall do so once more, but I hope that it will be a relevant point.

Mr. Davies: It is a relevant point, and I hope that the Paymaster General will deal with it. There is no point in the Government consulting unless they are prepared to explain why they are introducing measures. Why have the Government decided that it is appropriate for income tax under schedule D to be charged on a previous year basis, but corporation tax on a current year basis?

6.30 pm

Mr. Robinson: We took that decision because we felt that, on the whole, it would be much more reliable and more appropriate for companies to forecast quarterly on a revolving basis. I do not know on which boards the hon. Gentleman sits or used to sit, but the idea that a company does not make a clear annual forecast against which there is monthly and quarterly reporting is just unbelievable.

Mr. Davies rose--

Mr. Robinson: I have given way an awful lot and we must move on. I always give way to the hon. Gentleman, as he knows--although, quite honestly, I found some of the things that he said today utterly amazing. I shall now deal with some other points that were made in the debate and need some attention.

The hon. Member for Bexhill and Battle (Mr. Wardle) mentioned rapidly growing companies. There are precise provisions--I shall point them out--for rapidly growing companies that relate to whether they were smaller companies in the previous year or whether profits were as high as £10 million. That is a totally adequate provision.

I hasten to add that the hon. Member for Bexhill and Battle should not be seen as encouraging overtrading by companies. It is wise to be prudent in such respects. The question is again only one of cash flow impact. If a company were in so much trouble that it had to borrow from the Inland Revenue at 2 per cent. over base--

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I would not wish it on any company--it would not get a bad deal at that rate. It is worth pointing out that we have reduced the differential between the borrowing and lending rate of the Inland Revenue and companies from the 5 per cent. that prevailed under the Conservative Government for 18 years and was never touched, to a much more reasonable 2 per cent. At that rate, there is not a great deal for the Opposition to grumble about.

The general mix that we have come up with reflects what we thought was the best judgment of the situation.I do not think that anyone in the House--at least, no hon. Member has declared himself in such a light so far--rejects the principle of what we have done. The Opposition are trying to accept it in principle, but, having willed the end, they will not will the means. That is why the amendment is confusing.

We cannot make regulations under clause 30 without first laying them before the House of Commons. The regulations published on Friday are already in the Library and available to hon. Members. They have to be laid before the House so that we can scrutinise them before they come into effect. Not surprisingly, we do not need the amendment to require that.

The second reason anybody who looks at the amendment is bound to be very puzzled is that it will require instalment regulations to be made under the affirmative resolution procedure. That is the point that the right hon. Member for Hitchin and Harpenden is trying to make in tabling the amendment. Indeed, he went on to say, when challenged, that he could not remember in his experience in the Treasury--I think that he served successively as Financial Secretary and Economic Secretary--the Conservative Government doing anything of the kind that we are proposing. Perish the thought.

In the light of that damascene conversion, why, if the Conservatives did not like regulations being made under the negative resolution procedure, did they not change it during the 18 years that they were in office? I shall tell the right hon. Member for Hitchin and Harpenden what the Conservatives did in those years and give a few figures to substantiate my comments.

The Conservatives were responsible for hundreds of sets of tax regulations that were introduced under the negative resolution procedure, including nearly 200 on direct taxes over the three years to March 1997. The right hon. Member for Hitchin and Harpenden said that the Conservative Government never did any such thing. Perhaps he did not know what they were doing. Perhaps he did not know what he was doing when he was in the Treasury. Above all, perhaps he did not know whatthe right hon. and learned Member for Rushcliffe(Mr. Clarke) was doing when he was Chancellor. I am sure that the right hon. and learned Gentleman very often did not know about such detail.

In 1993, the Conservatives quite happily made new regulations covering the deduction from the pay-as-you-earn scheme--tax from employees' wages and salaries--under the negative resolution procedure. What does the right hon. Member for Hitchin and Harpenden have to say about that? Those regulations affected tens of millions of people and tens of billions of pounds of tax. The simple fact is that the right hon. Gentleman did not know what he was talking about then,

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did not know what the right hon. and learned Member for Rushcliffe was doing, and neither of them knew what the Government were doing.

The amendment is inappropriate and unnecessary and I of course urge the Committee to reject it.


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