Simpler, lower taxes. This is the kind of stuff that revives economies. Look no further than Ireland. The ’Celtic Tiger’ has a corporation tax rate of 12.5% and has enjoyed 15 years of strong growth. Pressure has since mounted on Northern Ireland, in particular, to match the corporation tax rate of their business friendly neighbour. Northern Ireland’s corporation tax is the same as the rest of the UK’s, 30%. Although slightly lower than it was, only last October the Chairman of the CBI, Richard Lampert, warned the Government that the UK’s high corporation tax was having an affect on the economy’s competitiveness and discouraging companies from investing in the UK. “Either companies will generate more revenue outside the UK or Corporation tax has to come down”, was the CBI’s stark warning.
It’s therefore terrific news that the Conservatives have signalled they will cut corporation tax. Reuters tells us that George Osborne will cut the rate from 30 to 27 pence. And what is more, the £4.5bn cost will be covered by scrapping complex tax reliefs for firms. It is reported that such a move would create an extra 160,000 jobs and is likely to pay for itself through increased tax revenue. Gordon Brown has been reluctant to promise further tax cuts for business, so this stands to win Osborne crucial support from the City.
20/03/2007 at 08:57 |
Amen – cutting corp tax rates boosts revenues and stimulates economic activity. Expect but ignore any fool that come on here talking about EU subsidies to Ireland. The net contribution since they joined equates to about one year of the UK’s defence budget.
20/03/2007 at 13:19 |
It is excellent news. Since 1997 the UK has slid down the world ranking of competitiveness, and moves to cut corporate tax will help reverse the trend.
20/03/2007 at 14:28 |
But do people vote in the interests of the company they work for, of for themselves? There are lots of tax-cutting votes out there, better won through cuts in personal taxes. All good though.
20/03/2007 at 16:37 |
Good point, Joseph and one we need to be aware of. However, I’d like to think that we are trying to get into power in order to do the right thing not just to win elections.
20/03/2007 at 18:15 |
But with such a close run thing, I little coincidental ‘voter benefits’ tax policy could see us in, after which we can put in the right tax structure for the country.
20/03/2007 at 19:39 |
Joe,
Did we not try to sell voter tax cuts at the last election though, some £4bn, and that didn’t seem to help us. It appears to me that any direct cuts in tax can be easily attacked by Labour and translated into public service cuts. This is what got us last time. The small cut in corporate tax will be enough, however, to get the City on side perhaps???
20/03/2007 at 20:37 |
Well, already this cut is larger than that – and the 4 billion was spread out among about 15 different taxes so thinly the scarcely would have impacted. The last election would have had the same result whatever policies were offered – I don’t think its a good model at all to look at the voting propensity of the particular policies that were offered.
21/03/2007 at 08:15 |
We should be able to reorganise tax and benefits at little overall cost so that we can commit that people on the minimum wage will not pay any payroll taxes. It is a disgrace that this is the case and I think that would be a good thing to do and electorally popular.