Finance Bill

The world was very different in 1997. Taxes around the world were a lot higher in our competitor nations then than they are today. The Government have got to live in the modern world. That is why I said that we are in 2007, not 1992 or 1997. The world has much lower interest rates and, in the better countries, much lower tax rates. Our leading competitor nations are cutting tax rates to send exactly that kind of signal on incentives to enterprising companies and individuals. The Government should understand how quickly the situation is moving. The threat of India and China—although in some ways their success helps us—is very real. The Government must understand that if we wish to compete successfully we must move with the times. We bequeathed to the Government an economy that was performing very well and was well down the table of high-tax regimes. We had one of the lowest-tax regimes among the serious countries. Under this Government, we have crept right up the table of high-tax regimes. That is not because the Government have increased business tax rates—on the contrary, in some cases they have cut them—but because other countries have cut theirs far more, so we are not nearly as tax-competitive as we were in 1997.