MP for Windsor
Working Hard For You
Foreign investment in the UK

Adam Afriyie: To ask the Chancellor of the Exchequer what estimate he has made of the amount of foreign direct investment generated since 2010 as a direct result of the lower rate of corporation tax.

David Gauke (The Financial Secretary to the Treasury): Since 2010, the Government has cut the main rate of corporation tax from 28% to 21%. It will fall further next year, to 20%, giving the UK the joint lowest rate of corporation tax in the G20. The Small Profits Rate has also been cut to 20%.

These cuts are a central part of the Government’s long-term economic plan. They are intended to make the UK more competitive, supporting business investment and job creation.

Government modeling suggests that the corporation tax cuts introduced in this parliament will:

increase business investment by between 2.5% and 4.5% (£3.6bn to £6bn in today’s prices) in the long term

increase GDP by between 0.6% and 0.8% (£9.6bn to £12.2bn in today’s prices) in the long term

Foreign direct investment decisions are influenced by a range of factors including skills, market access, and infrastructure. Consequently, it is difficult to isolate the exact impact of the corporation tax cuts from reform in other areas. But recently published data on inward investment has been very encouraging.

In their 2013/2014 Inward Investment Report, UKTI said ONS data showed the value of FDI stock increased from £725.6 billion in 2010, to £936.5 billion in 2012.

UKTI also reported that the UK attracted more inward investment projects last year than in any year since records began in the 1980s. UKTI recorded 1,773 projects, creating 66,390 new jobs.

This is supported by analysis from Ernst and Young, who use their own independent database to assess inward investment. Ernst and Young’s Annual Attractiveness Survey, published in June, showed the number of inward investment projects in the UK had risen by 15% in the past year, against the background of a European market that grew by just 4%.

As noted above, it is difficult to isolate the impact of tax policy on these trends, and UKTI does not have estimates of how much of the new investment has been a direct result of the lower rate of corporation tax. But it is clear that the corporation tax reforms have changed perceptions of the UK competitiveness. For the past two years, the UK has ranked highest in the KPMG survey on international tax competitiveness, ahead of countries including the US, the Netherlands and Switzerland.

 

Online business registration rates

Adam Afriyie (Windsor, Conservative): To ask the Secretary of State for Business, Innovation and Skills what assessment he has made of the effect of online business registration on registration rates; and if he will make a statement.

Michael Fallon (The Minister of State, Department for Business, Innovation and Skills; Sevenoaks, Conservative): There is no register covering all businesses in the UK. The Registrar of Companies registers a subset of businesses and provides online registration for those businesses that register as companies or limited liability partnerships. HMRC registers sole traders for tax purposes.

Online incorporation via software filing agents was introduced in July 2001, followed in April 2010 by the launch of the Citizen Incorporation Service via Companies House Webfiling. The number of companies on the register has almost doubled, from 1.66 million at the end of March 2001 to 3.25 million at March 2014. In the financial year 2013-14, 98% of all new companies were incorporated electronically.

Companies House has carried out several studies to identify the main factors contributing to the increasing trend for company incorporations. This is attributed to a number of combined factors, such as the benefits of limited liability, changes to tax legislation and developments in the wider UK economy. There is no indication that the electronic enablement of company registration in itself has acted as a direct driver for the increase in new company registration rates, as just one of the methods the Government has used to help reduce the burden on business and the costs of running a company. This in turn has helped to make the UK one of the best places to set up and run a company.

Electronic services have also enabled Companies House to absorb the significant additional workload resulting from the growing register, make organisational efficiency savings and pass these efficiencies on to customers in the form of lower fees. For incorporation, the UK charges some of the lowest fees in the world.

 

Private companies’ usage of spectrum

Adam Afriyie (Windsor, Conservative): To ask the Secretary of State for Culture, Media and Sport what proportion of the (a) 30-300MHz, (b)300-3000MHz and (c) 3-30GHz bands of the radio spectrum is in the operation of the private sector.

Edward Vaizey (The Parliamentary Under-Secretary of State for Culture, Media and Sport; Wantage, Conservative): Officials have consulted Ofcom who hold such information. Ofcom advise that they do not hold such information for bands below 87.5MHz (as frequencies above this are considered to be the most important and usable), but have provided information for bands from 87.5MHz to 30GHz.

The table provides an overview of the proportion of total weighted spectrum accessed for market uses by band.

Lower frequency Upper frequency Spectrum authorised for market uses as a % of total weighted spectrum
87.5 MHz 328.6 MHz 47
328.6 MHz 3.1 GHz 73
3.1 GHz 30 GHz 80

The Public Sector Spectrum Release Programme aims to release 500MHz of sub-5GHz spectrum from public sector use by 2020. The most recent Programme update can be found on the gov.uk website:

https://www.gov.uk/government/publications/spectrum-strategy

 

Cabinet Office question Bringing old data sets online

Adam Afriyie (Windsor): To ask the Minister for the Cabinet Office what steps he is taking to incentivise departmental officials to bring old Government data sets online in accessible formats.

Francis Maude (Minister for the Cabinet Office): The UK has been recognised as the international leader in data transparency. During our presidency of the G8 in 2013 we led Members to commit to publishing data openly by default as a matter of principle through the Open Data Charter.

Departments are engaging the public and special interest groups about the most important data held by Government (whether old or new); publishing open data strategies and reporting to Parliament on progress on a quarterly basis.

Those data sets that are judged to have the most significant economic and social impact we refer to as the national information infrastructure, and are our priority for making available and accessible.

 

Number of people taken out of tax since 2010

Adam Afriyie (Windsor, Conservative): To ask the Chancellor of the Exchequer how many people in (a) the UK, (b) the Thames Valley and (c) Windsor constituency no longer pay income tax due to changes in the level of personal allowance introduced since 2010.

David Gauke (The Exchequer Secretary): By April this year this Government’s increases in the personal allowance (for those born after 5 April 1948) are estimated to have taken over 3 million individuals out of the income tax system altogether. 384,000 of these individuals live in the south east region, which includes the Thames Valley and the parliamentary constituency of Windsor.

These estimates are based on the 2011-12 Survey of Personal Incomes, projected to 2014-15 using economic assumptions consistent with the Office for Budget Responsibility’s March 2014 economic and fiscal outlook.

HM Treasury does not publish this information at constituency level.