It is often forgotten that companies do not actually pay tax. All they do is collect their tax on behalf of the Government from their customers and pass it on. If we go into the Tea Room and buy a Mars bar or whatever, we pay the cost not only of the ingredients, the machines and the capital deployed by the company, but of the corporation tax, the duty, the VAT and indeed national insurance as part of the price. Over the last 30 years that I have been in business, it has certainly been the case that the moving parts in running a business have become ever more complex, and tax in the general sense has occupied ever more time of the business person, particularly those who run small businesses. Anything that injects an element of certainty into the tax horizon for business is therefore extremely welcome, particularly at a time when lots of other things are changing for small businesses. The introduction of reforms in pensions, particularly auto-enrolment, changes to the living wage and other employment regulations create an atmosphere in which running a business feels very much like a game of 3-D chess.
We can look around the world at tax regimes for business where stability and lack of change has been a constant for some time and see success, irrespective of the rates. If we look at the United States, corporation taxes are actually quite high in comparison with this country—pleasingly—but also with the rest of the world. The US economy does extremely well, largely because tax rates have not changed for decades. The US has elected for stability and a lack of change to the relative level of the rate because it knows that one of the things most valued by businesses is certainty. Whenever people are starting or running a business, they spend their entire lives forecasting what the world is going to look like over the next two or three years. When people do that, they know that the day after the forecast, it will be wrong because of the many different moving parts, as I said. One area that business should be able to rely on for some certainty and stability is government. So the introduction of the Bill, which provides a four-and-a-half or five-year time horizon on national insurance, is extremely welcome.
There are people who might say that this is a gimmick, but much of what we do in the House is about signals. Economics is all about psychology and the individual choices that people make.