Research from the Centre for Policy Studies makes grim reading for those who want to see Britain as a leading hub of investment. The UK’s tax competitiveness was put at 26th of 38 OECD countries, with corporation tax at a more respectable 10th. However, any silver linings were crashed by the government’s U-turn on corporation tax. The UK has now fallen to a wretched 33rd position, both overall and on corporation tax. The number of OECD countries more welcoming to business than Britain has now trebled…
The figures mean that Britain is ahead of only France and Italy amongst the G7. They’re hardly the enterprising nations Liz “no new taxes” Truss would aspire to. The figures bring home the lunacy of Tory wets’ attack lines. Robert Halfon had called the mini-budget “libertarian jihad”. What would that make the lower-tax US, Canada, Japan and Germany?
What a difference 24 hours makes: this lunchtime The Sun broke the news that Truss “is considering raising Corporation Tax next year in spectacular mini-Budget U-turn”. A source tells Harry Cole that while the U-turn is being seriously considered, it wouldn’t be back up to the 25% proposed by Rishi before leaving the Treasury. In light of this news, Guido thought it was worth reflecting on what Liz herself said at yesterday’s PMQs…
“What we are doing is simply NOT putting up corporation tax. It’s not a tax cut, we’re just not raising corporation tax. And I feel that it would be wrong, in a time when we are trying to attract investment into our country, at a time of global economic slowdown, to be raising taxes. Because it will bring less revenue in. And the way that we are going to get the money to fund our National Health Service… is by having a strong economy with companies investing and creating jobs.”
Kwasi, meanwhile, is over in Washington for the IMF meeting. Channel 4 doorstepped him on his way in, where he said “I’ll be coming out with a statement on 31st October and I’m not going to pre-empt that.” As The Speccie’s James Forsyth points out, if the markets are now pricing in a U-turn, and the government decides against one, they’ll likely be in a worse position than they were 24 hours ago…
Rachel Reeves is continuing Labour’s long-standing tradition of being utterly inconsistent on tax, though has now begun pirouetting on policy within the same interview. During her Today outing, the Shadow Chancellor slammed the Tories for having “fanned the flames… [with] more unfunded tax cuts, which has resulted overnight in the pound falling to an all-time low against the dollar.”
So far, so good…
Minutes later, however, she suggests Labour would pay to keep the new 19% basic rate of income tax by borrowing:
“In emergency situations – and we are absolutely in a national emergency at the moment – you can borrow”
Labour is mitigating this hypocrisy by claiming the difference between Labour and the Tories is that she would not borrow on the same scale as Kwasi and Truss. Labour have accepted two thirds of the personal income tax cuts. They are only rejecting one cut, the top rate cut…
Meanwhile, Guido also spots Rachel Reeves is now arguing that cancelling the planned corporation tax rise is “wrong”, and Labour wants to see the rate rise in April. This is the same Rachel Reeves that led Labour MPs through the No Lobby in 2021, opposing Rishi’s hike to Corporation Tax…
Rishi’s going in hard on Liz over her change of mind on Brexit – it turns out it’s quite easy for them to hit back at him with even more recent examples of political conversions…
