Finance Bill

The World Bank's assessment shows that we are the best in the G7 for ease of paying taxes—that is the real test of what is happening in our tax system. New clause 6 provides that the Government should report to Parliament on the competitiveness of the UK tax system. We already provide a wide range of information in impact assessments of Budget measures, progress reports at the Budget and our annual departmental report. I am not clear that a further report would have the benefits suggested. Amendment 36 would pose a serious risk to the fairness of small business taxation. Seventy-five per cent. of UK businesses are unincorporated, so do not pay corporation tax. In proposing benefits for only "very small companies", the Liberal Democrats would disadvantage the 3.5 million unincorporated businesses relative to the small companies with which they directly compete. The amendment would also increase tax-motivated incorporation, helping few businesses and introducing additional complexity. It would also mean an unfunded tax cut. As the hon. Member for Taunton (Mr. Browne) said, he moved an identical amendment to new clause 4 in Committee. I was pleased that he did not press it to a vote then, and I hope that Conservative Members will not press it today. We will publish draft legislation and an impact assessment at the time of the pre-Budget report, before the introduction of such a measure in next year's Finance Bill. Treasury officials will be happy to consider any comments on the proposed legislation at that time. The difficulty with European law is clear. I think that we made the right judgment, and there will be an opportunity to reflect on that when the information is published. New clause 4 is unnecessary because the opportunity for which it would provide will be given at the time of the pre-Budget report. The new clauses and the amendment would introduce additional complexity and bureaucracy. I hope that hon. Members will not press them to a Division.