Mr. Jack: I seek the Financial Secretary's help on a constituency matter. One of my constituents, Mr. Marcus, is able to use a modern farm tractor for activities on and off the road. He has experienced considerable difficulties with the tax regime when his tractor changes from agricultural to haulage uses. I put down a marker here: as people in the rural economy seek innovative ways to use capital equipment at times of difficulty, anomalies may emerge. I shall write to the Financial Secretary and ask him to review Mr. Marcus's case with a view to helping people in the rural economy who are developing more entrepreneurial uses of their farming equipment.
Mr. Timms: I would be happy to consider the right hon. Gentleman's letter. We must be careful not to create a competitive difficulty when people carrying out rural haulage services find a different way of providing those services that works to their disadvantage. I shall certainly examine carefully the case of the right hon. Gentleman's constituent.
Question put and agreed to.
Clause 13 ordered to stand part of the Bill.
Clause 14 ordered to stand part of the Bill.
Payments by Commissioners in case of error or delay
Question proposed, That the clause stand part of the Bill.
Mr. Ottaway: I shall not detain the Committee long. The Economic Secretary was not present at the aggregates levy debate on the Floor of the House, but the clause reminds me of it. Can she provide some background to the clause? Why are payments by commissioners in cases of error and delay relevant and what has happened up to now? Commissioners have made errors and delays in the past, so what is new about the clause?
The Economic Secretary to the Treasury (Miss Melanie Johnson): The clause and the schedule provide for the payment of compensatory interests where excise duty has been overpaid or underpaid as a result of an error by Customs and Excise or where the payment of a claim to excise duty has been unduly delayed. It also provides for the repayment of excise duty or compensatory interest to persons or businesses incorrectly refused authorisation, approval or entitlement to goods relieved of excise duty.
The measure brings excise duties into line with other duties and taxes administered by Customs and Excise by providing a statutory requirement to pay compensatory interest. The difference is that provisions for tribunals to take measures have existed in the past, but there will now be a statutory requirement. Traders in excise goods have welcomed the measure and I hope that the Committee will support it.
Mr. Ottaway: I am grateful to the Economic Secretary and would not disagree with her verdict. Would she confirm that the point is about shifting from a power possessed by tribunals to a statutory power of commissioners?
Miss Johnson: I could write to the hon. Gentleman on that, but I believe that rates can be set by a value added tax and duties tribunal in judging individual cases, whereas the rate of interest will be determined by regulations set out in 1998 in respect of interest rates used for other indirect taxes. As the hon. Gentleman will be aware, the rate is 5 per cent. As I said, that is a discretionary power, whereas the provision in the clause is statutory.
Question put and agreed to.
Clause 15 ordered to stand part of the Bill.
Schedule 3 agreed to.
Charge and main rate for financial year 2002
Question proposed, That the clause stand part of the Bill.
Mr. Ottaway: I want a general debate on corporation tax in the remaining minutes of the sitting, but I am not sure whether it should be discussed under clauses 54, 55 or 56.
The Chairman: Order. I suggest that the hon. Gentleman finds out quickly, as I am about to put the question on clause 54.
Mr. Ottaway: I am grateful for your assistance and guidance, Mr. Hood.
On the face of it, the proposal is a planned announcement of the level of corporation tax levied on Britain's corporations. The Prime Minister repeatedly says that he is proud of the fact that he has reduced the headline level of corporation tax from 33 per cent. to 30 per cent. That appears to be a laudable claim; it is the sort of thing that Baroness Thatcher might be proud to say. But when one looks at the small print, and sees what is actually happening to the level of taxation on companies, the opposite is the case. The Chancellor's figures in table C7 on page 192 of the Red Book, show corporation tax rising by £5.7 billion from £32.1 billion in 2000-01 to £37.8 billion in 2001-02. The Chancellor could easily have chosen to moderate those vast increases by raising the corporation tax thresholds at least in line with inflation or by cutting other taxes for business, which is what the Government said they would do. The Labour party business manifesto in April 1997 stated:
``We will not impose burdensome regulations on business, because we understand that successful businesses must keep costs down''.
What absolute codswallop! What effort have the Government made to keep that pledge to the electorate? The manifesto continued:
``We will cut unnecessary red tape''.
In his speech at the Mansion House in February, the Secretary of State for Trade and Industry said:
``I guarantee that we will not allow regulation to stifle enterprise and innovation''.
At the annual dinner of the Confederation of British Industry, the Prime Minister said:
``Enterprise should be encouraged through a climate for business and a tax system which rewards success.''
The Chancellor was reported as saying that he wanted tax cuts for business, not tax rises.
The Government have singularly failed to keep any of those pledges; they have increased the burden on businesses and the level of taxation on companies. Members of the Committee need not take it from me, they can listen to the Confederation of British Industrythe voice of British industry. Commenting on the financial burdens that the Government have piled on business, Digby Jones, director general of the CBI said:
``Enough is enough. I really do say to the Government `no more'''.
What state have we reached when the director general of the CBI has to go to the Government and say ``Enough is enough'' after their pledges during the election campaign? Mr. Digby Jones also said:
``Ministers must do more to roll back the burden of business taxation, which has gone up £5 billion a year during this parliament''.
The CBI pre-Budget report submission complained of the
``hike in business taxation since 1997''.
``We believe that several recent policy proposals are potentially damaging and must be amended.''
It is not only the CBI that holds those views. Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union said:
``We're not against taxation, but do you really hit business with new taxes when industry is already under pressure from the pound? Business should be treated more fairly.''
The Government are quiet when it comes to quotations like that from their own supporters. Those are the sorts of quotations that count, and the ones that they should be listening to. There is no doubt that the Government have done nothing but raise the levels of taxation and regulation on business. They cannot be proud of the burdens that British industry has to face today. It is a travesty for them to stand here quietly hoping that we would slip through the rise in corporation tax before 7 o'clock. The Minister should stand up and tell us what he is actually doing for business.
Mr. Peter Kilfoyle (Liverpool, Walton): Does the hon. Gentleman accept that many of us would like us to see corporation tax rise even more?
Mr. Ottaway: There speaks the truth. I respect the hon. Gentleman. There are not many hon. Members who have resigned from governments on points of principle. He speaks for the heartlands of the Labour party, and has seen that his party supporters are now paying more for their cars, cigarettes, and pint in the pub. He has seen tax rises on his supporters quite consistently over the past three years. The country's tax burden has been regressive and is hitting his supporters worst of all.
Mr. Kilfoyle: I thank the hon. Gentleman for his warm words, but will he take it from me that what the people that I represent have seen is the establishment of Tory-free zones, simply because they have no faith in the Opposition's plans to deliver anything material in their lives?
Mr. Ottaway: What the hon. Gentleman needs is a few Tories around the place. It is the Conservative party that stands up for lower taxation, that voted against the tax rises and stood up for his supporters. Unless he breaks ranks and votes against this wretched Government, he will be replaced by a Conservative Member of Parliament. That is the consequence of the Government's levels of taxation.
I return to corporation tax. We are not happy about the levels of tax on business. The Minister should be announcing a whole raft of proposals that will relieve the burden of taxation on business. He should be seeing cuts on the motoring costs of business. [Interruption.]
The Chairman: Order. Hon. Members should listen a little more, and speak a little less.
Mr. Ottaway: The Minister should be announcing business rate relief; reforms of capital gains tax, share options, and venture capital; the abolition of the ridiculous double taxation relief proposals. He should repeal IR35 and replace it with more appropriate regulations. Those are the proposals of the Conservative party manifesto for the next general election. We are the party that believes in business, fights for business and stands up for business.
Mr. Jack: My contribution on corporation tax will not match the wonderful and aggressive speech of my hon. Friend.
The Chairman: Order. I suggest to the right hon. Gentleman that if he wants to make a speech on corporation tax, he relates it to clause 56.