Mr. Sebastian Barnes:

The issue of corporation tax, as the Deputy points out, is a long-standing concern. It has increased in recent years as the share of taxation coming from corporation tax has increased. With regard to how it is managed, there are two matters to consider. One that we have proposed in the past is that unexpected positive surprises from corporation tax should be set aside and saved rather than spent, which has been the case over recent years. That is to avoid the State building up permanent spending commitments on the basis of this tax, which is very volatile and may be somewhat fragile. It also ultimately requires an adjustment to move away from that. That either involves reductions in spending elsewhere or increases in other forms of taxes to reduce that vulnerability.

One of the vulnerabilities is that the companies themselves might do not do as well or might decide to move somewhere else, which they can do fairly easily. The other vulnerability is the possibility of changes in the international tax environment, which is partly to do with processes such as the OECD's base erosion and profit shifting, BEPS, process and a number of other discussions. Ultimately, it is likely that this issue will correct, and it would be good to anticipate that rather than face it as another economic shock like the sorts of shocks we have seen lately.