Mr. Michael Tutty:

I will leave the corporation tax question to the expert on corporation tax beside me. On housing, we were really just looking at the risk that housing development might accelerate. It would be good if it did because there is a need for houses to be built. However, all we were saying is that if it does ramp up, we cannot ramp up everything else in the economy at the same time or else there will be overheating. As the Deputy rightly pointed out, our unemployment rate has fallen quite low. Therefore, for housing to develop we either need to move resources from other things into housing or bring in people from abroad, which does take time. We have no magic formula. We are certainly not advocating slowing down the housing programme. Our advice is that if it is ramped up beyond what is now predicted, we need to be careful about what else is happening in the economy. Giving tax reliefs to have more consumer expenditure leading to more employment at the same time as ramping up housing development would not be a good idea.

On the question of a VAT reduction, it is not within our remit to talk about particular measures so we cannot say it is a good or bad idea. I was formerly in the Department of Finance and in that time I heard too many proposals for tax cuts which claimed they would be self-financing but never were. I would be very wary of talk about a self-financing tax cut.