Businesses should benefit from tax cuts under a Conservative government, a recently published review of economic policy has recommended.
Small businesses would gain, paying 20p in the pound, a decision that goes against prime minister Gordon Brown’s measure to increase the amount businesses are paying from 19p to 22p in the pound over the next two years.
The review, led by former cabinet minister John Redwood, has concluded that business tax cuts will not affect the stability of the UK economy, claiming that the benefits of lower taxation on income and profits are “overwhelming” and citing recent tax cuts in Ireland as an example.
“Millions of people working in small businesses find the burdens for government too great,” said Redwood.
He added, “Ireland shows that if you cut capital and business taxes you create more jobs, and generate more revenue. If that worked in Ireland why can’t we do it here?”
Although yet to endorse the review as formal policy, shadow chancellor George Osborne stated that the report “offers us a set of imaginative policy proposals directed at improving the competitiveness of our economy and ensuring that more Britons and more parts of Britain share in the global prosperity of our times.”
Publication of the review has stirred up calls for further changes to aid businesses. Alysoun Stewart, head of Grant Thornton’s strategic services group said the Tory measures were “a recognition of the increasing competitive damage caused by over-regulation and red tape” and warned that, without change, “stifling corporate regulation remains the number one barrier to business growth.”
© Crimson Business Ltd. 2007
