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Finance Bill

I beg to move, That the Bill be now read a Second time. As my right hon. Friend the Chancellor outlined in the Budget debate in March, we now have a foundation of fiscal strength, enabled by our decision in 1997 radically to reduce national debt. We have the lowest debt interest payments for a century, matched by the lowest unemployment costs for a generation. As the Chancellor pointed out, social security bills for unemployment have been halved since 1997, saving another £5 billion a year, and inflation has been 3 per cent. or less annually for the past eight years, making Britain’s the least volatile and most stable of all major industrialised economies. We therefore have sound foundations on which to face up to global challenges and provide domestic success, and a record of macro-economic stability that lets us invest in the future. The Bill and the measures contained therein reflect the Government’s ongoing determination to ensure that our tax system is fair and competitive. Only last September, the World Bank ranked the UK first in Europe and seventh in the top 20 countries in which to conduct business. Before that, in January, the Organisation for Economic Co-operation and Development ranked our economic and administrative regulations as among the lowest in the OECD. Looking forward, and faced with the accelerating pace of technological change and the rapid expansion of global competition, it is clear that our economic future cannot be founded on low-skilled, low-tech enterprises. That is why we must focus on establishing British leadership in skills, science and the knowledge economy, and on evolving a sensible, flexible fiscal framework that supports business as we face world competition. It is against that backdrop that we introduce this Finance Bill containing the legislation announced in the last Budget statement which, owing to the election and following negotiations with the Opposition, was not enacted in the Finance Act 2005. Our aim is to support and encourage business as it tackles global economic challenges. Our underlying philosophy is both to produce fair taxation—thus reducing avoidance of taxation, which is not appropriate in a modern, fair economy—and to simplify the business environment to ensure clear, dependable and fair interaction with the state. Before I discuss the individual elements of the Bill, let me inform the House that the committal motion on the Order Paper has been changed, at the request of the Opposition. The revised version is now available in the Vote Office.