Oral Answers to Questions — Trade and Industry – in the House of Commons am 12:00 am ar 20 Mawrth 1991.
To ask the Secretary of State for Trade and Industry what representations he has received from industry about the Government's economic priorities.
I continue to receive representations from industry supporting the Government's determination to defeat inflation and to create a climate in which enterprise and wealth creation can flourish.
Will my right hon. Friend confirm that yesterday's cut in corporation tax reflects the Government's determination to create the right climate in the market for business and, coupled with the Government's determination to drive down inflation still further, represents the real needs of British industry?
I can, indeed, confirm those points. The reduction in corporation tax that was announced yesterday by my right hon. Friend the Chancellor will be of significant benefit to industry. We already have the most attractive environment for industry of any country in western Europe, which is why we attract more inward investment than any other country in western Europe. Tax is a major part of that and we now have the lowest rate of corporation tax of any country in the EEC.
Will the Secretary of State explain why one of the Government's economic priorities is to increase unemployment in the retail sector? Does he agree that the increase in value added tax that was announced yesterday is bound to have a significant effect on that sector and will significantly increase the recession in retailing?
That is absolute nonsense. One of the policies of the hon. and learned Gentleman's party has always been to spread VAT more widely.
Does my right hon. Friend agree that it can be estimated that a 1 per cent. downward movement in inflation could save British businesses £5 billion? Was not the key announcement in yesterday's Budget, therefore, the expectation that inflation could be down to 4 per cent. by the last quarter of this year? Does my right hon. Friend further agree that that means that, on top of the welcome corporation tax reductions yesterday, the Government are doing the right thing for British industry?
My hon. Friend highlights an important point. The reduction in inflation that was forecast in the Budget as being faster than was previously expected will be immensely welcome to British industry. It is the key to our economic future and to solving all other economic problems.
Is not it the case that the day after what the Chancellor called the Budget for business 7,000 redundancies and almost 100 company closures have already been announced? Does the right hon. Gentleman accept that growth is down by 2 per cent. this year, manufacturing output is down by 5 per cent. and investment is down by a massive 10 per cent., which is the worst record in western Europe and the worst in British history since 1932? Why is the interest rate cut that industry needs being delayed? Is not it the case that the Budget does too little, too late to prevent a spring and summer of redundancies, closures and bankruptcies, which is the direct responsibility of this Government's Ministers who have failed?
The hon. Gentleman plays his normal recorded message to us, unchanged since before the Budget. British industry has responded to the Budget by welcoming it and all its major tax changes, which it considers essential for the future of this country. It is significant that the hon. Gentleman did not even mention them.
Has my right hon. Friend received any representations from business men, asking him to introduce an industrial policy similar to that recently outlined by the Labour Opposition?
No, I have not. On the contrary, I have met many business men who have said that the last thing that they want is men in Whitehall telling them how to govern their companies. They welcome the fact that we are leaving more money in the hands of business so that they can take the decisions on investment, research and development, and training, which will strengthen their companies in the future.