My Telegraph article on Corporation tax

The government  rightly tells us it wants to promote growth in the March budget. To do so it will need plenty of investment from companies already here, and new commitments  from companies attracted to the UK by the opportunities. To do  that it is going to need competitive  business tax rates. It should not be putting Corporation tax up by 31% in April just when it needs a boost from the  business sector. It  needs to get companies  to put in a wide range of additional capacity in everything from energy to food. Without that taming inflation is more difficult. It is also the way to level up and to create the extra better paid jobs we want.

 

The aim of taxation should be to raise the tax you need to pay the bills with the least damage. All taxes do some damage. Governments use taxes to discourage people from doing things like smoking, excessive drinking, and  polluting . When they turn to taxing jobs and  investment they need to be careful. Do it too much and you put too many off doing the good things of working and serving the customers better. You can end up with less revenue, not more, as well as with an unhappy country.

 

It is best to tax the rich and profitable, as they have a lot more money to tax. Rich people and big companies also have many more options than the rest of us. They can switch their business, their residence and their investments to somewhere else if a given country puts the tax rates up too high. The way to get more tax revenue out of well off companies and people is to set rates they will stay to pay. Hike rates too much and you can have an exodus of the money you want to tax. High rates of income tax under Labour in the 1970s led to the brain drain as talent went elsewhere, contributing to a bad economic decline. They ended up with insufficient tax for their wider aims and a trip to borrow from the IMF which landed them with spending cuts.

 

George Osborne knew this when it came to Corporation tax. His steady reductions in rate, eventually down  to 19% led to good increases in tax receipts as more businesses came to the UK and more UK businesses ploughed profits back into more UK taxable activity. Meanwhile our neighbour Ireland opted for a much lower rate. At  just 12.5% they scooped the investment  pool. Ireland now gets four times as much business tax per head than we do. Large corporations have chosen to base substantial activity there to take advantage of the low rate. It has also led to Ireland having a GDP  per head more than double the UK’s and more than two and half times  above the lower figure for the EU.

 

So why would you want to turn down the offers of world business to come, to create jobs and make money? The reason seems to be strange. It is based on  Treasury and OBR accounting and estimating. The OBR is having a difficult time with the  numbers. They forecast  a  deficit of just under £100 bn for this year in the March budget. In the November Financial Statement they put this up by more than three quarters to £177bn. Now just two months on and with only two months left to forecast they are putting it down again by £30bn. Yet it is on these volatile and inaccurate forecasts that the Treasury hangs the judgement they need to put taxes up.

 

To try to  get the forecasts right the OBR has to forecast spending and revenue. Spending should be fairly easy to forecast as there is a complex system of spending control and approval, though of course energy subsidies have introduced a more volatile component. They find forecasting the revenue difficult, as it depends on how fast or slow the growth is. As a general rule when growth is faster the OBR tends to understate the revenues and when it is slower they tend to understate the deficit. It appears that their tax model is not dynamic enough.

 

There is  no magic money tree, but there is a strong behavioural effect on taxes you can legally avoid. The government accepts this is some cases. The whole idea for example of a congestion charge or a carbon tax is to get people to avoid it. They are urged  to drive less or burn less fossil fuel. In the  case of business profits tax we can see worldwide the turnover and profits gravitate much more to the lower tax rate places ,as with Ireland. The  official models do  not seem to capture this. The forecast that a big hike in the corporation tax rate will  bring in an extra £15bn more by the second year seems unlikely. The absence of tax rate rises in January did not prevent and may well have assisted the unexpected surge in revenues that the OBR did not foresee.

 

The UK is crying out for so much new investment and business. We are short of electricity grid and cable capacity, short of reliable electricity generation, short of glasshouse and polytunnel market gardening, short of water supply in some places and during dry spells, short of steel capacity, battery production, short of home caught fish, short of domestic timber, short of good safe road capacity and short of much else I could mention. Many of these needs can be met by private sector investment. They often require government leadership of the projects, provision of the licences, and lower stable tax rates that companies can rely on. The UK was doing so well promoting itself up the league table of international tax competitiveness. It would be a tragedy to throw that all away today in the  vain and self defeating pursuit of a lower deficit. Higher tax rates will lead to less growth and lower business tax revenues. Follow Ireland. The Chancellor himself when a free man argued just this case.

 

 

67 Comments

  1. Mark B
    February 25, 2023

    Good morning,

    . . . short of glasshouse and polytunnel market gardening . . .

    Funny you should mention this, Sir John. I watched the latest instalment of, Harry’s Farm (YT) yesterday and, he mentions that the government are will to pay him not to farm his land. He also mentioned the reasons why there is so few eggs and fresh fruit. This stems from the fact that the government would not subsidies poultry and fruit and veg growers during the spike in energy, forcing them to either reduce or stop production. The supermarket chains refused to accept the increase in prices and thought they could get supplied from both Portugal and Spain. When it turned out both had a bad season and kept most of their produce themselves, this lead to a shortage.

    All this, and more, ca be traced back to, ‘The Greenest Government EVER !!!’ And your party has just compounded problems on top of problems with NZ.

    You really need to stop listening to that multimillionaire Socialist, RedEd.

    1. Sir Joe Soap
      February 25, 2023

      It’s still poor supply chain management by supermarkets to actually run out of staple goods. Or perhaps they’re on board too?

    2. Cuibono
      February 25, 2023

      +++10
      I was once blocked ( lol) on social media by a famous environmentalist for suggesting that we should go back to eating seasonally. Apparently that approach leads to famine and seasonal eating is an unacceptably right wing approach to things.
      We ain’t got no tomatoes though ‘ave we? Where are all the solar/wind/water/donkey powered greenhouses? Eh?
      Never could get salad in the winter except very few and very expensive flown in from (Jersey?) around Christmas time.
      “Dirty”celery was the thing …home grown with a top dressing of soot.

      1. a-tracy
        February 25, 2023

        Cuibono, there is some good news out there
        https://www.business-live.co.uk/manufacturing/tomatoes-see-light-tech-investment-19399582
        Google Dyson farming, we should be investing in this genius to find a UK solution.

        When it was reported that the MP suggested eating turnip I thought here we go on the merry-go-round again. I’ve just had a lovely winter salad of white and red cabbage, onion, beetroot, carrot, a bit of iceberg lettuce and just a couple of slices of tomato, a touch of lemon juice, delicious. Some people add small cubes of potatoes to this or pasta and mushroom.

    3. Mickey Taking
      February 25, 2023

      Over the years we watched relience on EU farmers enjoying us as a customer, producing early season and cheaper goods. More recently our costs of production, shortage of workers, power pricing and a blinkered government has meant our farmers are giving up. When will home production be supported?

  2. Javelin
    February 25, 2023

    It’s very simple.

    Hon. Mr Hunt is not a Conservative.

    1. a-tracy
      February 25, 2023

      Mr Hunt has sold his soul to get his dream top job. The rewards seem to come to these people after they leave office for doing as they are instructed against the public.

    2. Donna
      February 25, 2023

      He’s not very honourable either.

  3. Geoffrey Berg
    February 25, 2023

    It should also be said that Corporation Tax is the tip of an iceberg of tax. Attracting companies here also means extra revenue from Income Tax and National Insurance (from extra employment), Value Added Tax (from extra activity) and usually extra incidental tax revenues whereas frightening people away through higher Corporation Tax just leads to more expenditure on social security (and associated costs) to sustain more unemployed which is ‘dead money’.

  4. DOM
    February 25, 2023

    I think we can ignore the new Chancellor who is merely an EU plant so let’s assume tax equalisation with the EU is the main purpose of raising CT which is something the EU fears as it drags investment away from the continent. How can Tory MPs stop this charade as they’re the only ones with enough influence to do something about it.

    I bet not one Tory MP stands up and condemns this EU imposter that is now Chancellor

    1. Cuibono
      February 25, 2023

      I think that JR knows how to do it. He does it in interviews.
      Unapologetically sticks to his argument and viewpoint.
      He takes no prisoners but remains super calm and measured.
      Others I have seen…well..talk about back-peddle and fluster!

    2. Donna
      February 25, 2023

      Of course it’s Tax Equalisation …. our Corp Tax is to be closely aligned with France (whose economy is in basket-case territory).

      Ireland gets a Free Pass at the moment since it’s been doing the EU’s dirty work re. the Protocol.

      1. hefner
        February 25, 2023

        I always love the ´basket-case economy’ comment for France. When I am there, whether it is the quality of the motorways, of the local roads in the south of Massif Central, the variety and quality of food, the much wider availability of ‘stuff’ available in the so-called discounters Aldi and Lidl, I am always wondering how comes we cannot have similar things in the whole of the UK.

        Obviously I am expecting the usual intelligent comment about the date of my moving there. Well I bought a house in France in 2015, and have now sold the house in the UK … Macron here I come 😉

        1. John Hatfield
          February 25, 2023

          Vieux con.

          1. hefner
            February 26, 2023

            I was not expecting less. Thank you.

    3. graham1946
      February 25, 2023

      Unfortunately, we cannot ignore the Chancellor. He is due to be in office for the best part of 2 more years and will do a great deal of damage to the country. Nothing will be done. The Tory MP’s don’t have the courage, even those who know they will be out of their seats at the next election, to challenge the government and will just nod through any old thing Hunt and Sunak propose in the budget(s). You’d think they’d be trying to get something positive out of their remaining time, but like lemmings they are resigned to their fate and rush to the cliff edge. All we can do is punish them when we get the chance, even if it means getting something worse, though there is no certainty that anything can be worse.

    4. Chris S
      February 25, 2023

      It’s actually far worse than having a pro-EU Chancellor determined to equalise corporation tax with the EU !
      He’s actually trying to score brownie points in Brussels by having the highest rate in Europe !

      It’s all part of a plan by Establishment Remainers in the Civil Service and Bank of England to deny the British economy growth and further damage Brexit by driving our economy towards being the worst-performing in Europe. They certainly understand the point that our host is making about relative performance with Ireland, the facts are there for all to see.

      But then Brussels is equally determined to bring Ireland into line by levelling corporation tax across the Bloc. Another case of driving towards a lowest common denominator.

      1. hefner
        February 25, 2023

        Portugal has it at 31.5%, Germany at 29.9%, France at 28.4%, Italy at 27.8%, …
        taxfoundation.org ‘Corporate income tax rates in Europe’, 22/02/2022.

        1. a-tracy
          February 25, 2023

          Do these countries you mention headline figures on have any offsets hefner or small profit release? I read an article that said they did, however, I can’t put my finger on it just now as I’m investigating something else.

      2. hefner
        February 25, 2023

        taxfoundation.org ‘Combined federal and state corporate income tax rates in 2022’, 27/09/2022
        The lowest combined tax rate for the USA is 21% in Texas, Nevada, Washington, Wyoming, South Dakota, and Ohio. All other states have it higher, up to 29% in Minnesota, Iowa, Illinois, Pennsylvania and 30% in New Jersey.

        1. EU fan
          February 25, 2023

          You forget to allow for the many different allowances and offsets in your headline percentages in your two posts.
          eg
          Write downs
          Stock allowances
          Depreciation treatment.
          Reinvestment allowances.
          Set asides for bad debts
          Treatment on spending on R n D

          1. hefner
            February 25, 2023

            Indeed, but all these different allowances vary from country to country in the EU (and the UK) and from state to state in the USA, which makes the rates quoted by taxfoundation.org the easiest basic starting point for comparison.

          2. Sir Joe Soap
            February 26, 2023

            All short term allowances. They don’t prevent long term retained profit being hit by high corporation tax.

          3. EU fan
            February 26, 2023

            A very basic starting point I grant you.
            I was trying to point out that displaying just headline percentage figures without looking at the huge differences in allowances makes for a meaningless comparison.

        2. a-tracy
          February 25, 2023

          Perhaps you should Ireland this hefner, higher corporation taxes are better for them. Why are your beloved EU allowing them to get away with their uncompetitive behaviour.

          1. hefner
            February 26, 2023

            Could it be that contrary to what you think the EU, up to now at least, has not been particularly active in pushing for a EU corporation income tax rate and has left its individual members to set their own rates. Obviously it does not fit with the narrative that a number of people on this blog are keen on following, but ‘there is no worse blind than (s)he who does not want to see’.

            Reply The EU did force us to change Corporation Tax rules.

          2. hefner
            February 26, 2023

            Incredible, the brass neck! Rules not rates. George Osborne was able to change the CT rates from 28% in 2010/11 to 20% in 2015/16, then to 19% in 2017/18.

          3. a-tracy
            February 26, 2023

            Hefner, it had tax parameters and you know it! You didn’t answer the question, why are your beloved EU allowing its member Ireland to get away with an extremely competitive corporation tax rate for years and still be taking a blind eye to it when Ireland are supposedly doing so well because of this corporation tax?

            It is you that only sees what you want to see. I, on the other hand am happy to take on all manner of opinion and don’t constantly believe that only I’m right on every matter.

          4. hefner
            February 26, 2023

            a-tracy, what I really like on this blog is how a number of people coalesce against a comment they don’t agree with. It all started with ChrisS saying that soon the UK will have the highest CT rate in Europe. I pointed out that from the basic CTs in European countries it was likely it would not be true. Then bells and whistles were introduced by various contributors, but not in any quantitative way making it difficult to compare what it would mean for different countries.

            I still maintain these two points:
            1/ it is unlikely that the UK will have the highest CT rate in Europe
            2/ the EU as such has up to now not been actively involved in setting a CT rate that all EU countries must adhere to. And your point on Ireland is answered here (and do you really think that claiming it is not only the EU but my beloved EU makes for a better argument?)

          5. a-tracy
            February 27, 2023

            I believe for SMEs who don’t get offsets in the UK, that acorn alludes are open to larger concerns above, we are one of the highest payers in the EU but it will take me a while to check out my feelings on this one. To start in Germany! In the UK from April 25% from £1 profit.

            “Corporation tax (Körperschaftsteuer) in Germany is fixed at 15%. Corporations who have their management or registered office in Germany are liable to pay corporation tax. This includes AGs and GmbHs. Freelancers, one-person businesses and partnerships do not have to pay corporation tax.” source iamexpat.de.
            How much do small businesses pay in Germany 15%. Corporation tax is levied at a uniform rate of 15% and is then subject to a surcharge of 5.5% (solidarity surcharge). This results in a total tax rate of 15.825%.31 Dec 2022 source PWC How large can a small business be? A company is a small business if it does not exceed a turnover of €600,000 or a profit of €60,000.13 Jan 2021

  5. Cuibono
    February 25, 2023

    The U.K. is/has always been very short on longsightedness.
    I remember loads of glasshouses being pulled down…mostly for housing.
    And how about railways being irretrievably ripped up? And tramways?
    A short-sighted black tulip mentality.

    1. Sharon
      February 25, 2023

      Cuibono
      And schools… fewer pupils, so two high schools were pulled down; couple of years later, more pupils again and two new ones have had to be built!

    2. graham1946
      February 25, 2023

      It is the system. Politicians only look to four years at a time. When they get in, it is 2 years destroying what the other party has done, one year to do crackpot ideas, and one year electioneering and bribing the public with their own money. Glass houses are currently standing empty because this stupid lot let the cost of energy to heat them run riot. Even now, the cost of gas has fallen by 75 percent but they still intend to allow price increases in April. Stupid just does not cover it. Sabotage seems more likely.

    3. Christine
      February 25, 2023

      Yes, I live in an area that used to be famous for growing tomatoes because it had a mild climate and above-average sunshine. All the greenhouses have been demolished and replaced with houses.

  6. Sir Joe Soap
    February 25, 2023

    Probably the clearest issue in which the Tory party has steered in the reverse direction to using Brexit issues to boost the UK. You don’t deserve to be in government by this and many other measures.

  7. Will
    February 25, 2023

    We have already seen business investment decisions made in the light of the corporation tax increase that will permanently deprive the UK of future business activity, so Jeremy Hunt is showing just how anti-growth he is. We need a back-bench rebellion to threaten to vote down his budget if he continues to refuse to listen to reason.

    1. Mickey Taking
      February 25, 2023

      ‘Open for business’ has become a huge joke – the EU must have giggled at our pathetic attempts to persuade Corporations here.

    2. Timaction
      February 25, 2023

      Indeed
      Ask Astra Zenaca.

  8. boffin
    February 25, 2023

    Thank you, Sir John, for another good salvo of the common sense which is so sorely lacking in Whitehall.
    I wonder whether you and some of your Rt. Hon. friends are to suffer from the ludicrous pensions tax dilemma which is e.g. causing senior hospital consultants to leave the NHS, i.e. retire or find yourself paying for the privilege of continuing to come in to work, at a net loss?

    1. graham1946
      February 25, 2023

      Doubtful. If it affected them they’d change it. Ever seen a poor politician?

  9. John McDonald
    February 25, 2023

    Sir John low tax is fine but this is not the only reason to invest in a country.
    Where are our skilled people ? The things you list require Enginners at all levels. All that will happen is foreign companies and their work forces will do the work. They will pay UK tax but the profits will go aboard.
    I see you mention your favorite Electricity supply Industry again. You Privatised it but it has now run out of cable capacity 😊 As I say you can’t artificially create competition in networked systems.
    Private investment started all our utilities more than a 100 years ago as individual undertakings but when you start interconnecting them they need to be managed by one Organisation.
    Ask which companies are laying the fibre in Wokingham and who are their workforce actually doing the job.

    Reply There is one National grid. It is a highly regulated monopoly!

    1. John McDonald
      February 25, 2023

      The National Grid was once part of the CEGB which was also responsible for the Power stations as well. The area electricity boards were also part of the overall public owned Electricity authority.
      Effectively one Network with a single overall responsibility.
      The current National Grid is not responsible for what the Power Stations do or what the local Electricity Boards do. The joke is our local Electricity Board SSE no longer sells Electricity 🙂
      There is therefore no Commercial obligation to fund the National Grid from the sale of Electricity.
      You sold off the the money making bit and kept the loss making bit. And regulate it so it can’t make a profit in it’s own right. It was the same with the GPO (BT). You could not get anyone to buy these industries as one organisation. Keep the track but sell the trains. The track can’t make a profit on its own.

    2. hefner
      February 25, 2023

      JMD, Interesting, I also wondered about the company installing Fibre-to-Premises all over my area. Its workers are very efficient and do a very clean job. And yes, where are they from? I asked the person who seemed to be the head of the team. He asked me back with a very nice non-British accent whether I had any problem with the work they were doing (which I obviously did not have) but did not answer my specific question.

      1. a-tracy
        February 26, 2023

        Here you go again, only foreign workers are hard, good quality workers. Brits can’t do anything for themselves, it is attitudes like yours, this bigotry against you supposed fellow British citizens that creates the divide that you are happy to keep promoting. There are plenty of ‘British’ citizens with ‘foreign’ accents. My friend is a British citizen but speaks with an Italian accent.

  10. Donna
    February 25, 2023

    One thing we’re not short of is authoritarian, tax, borrow, print and flush down the drain Socialists in Westminster and Whitehall.

    In fact, we’ve got so many of them there wasn’t enough room in the Labour Party for them all, so they’ve colonised the Not-a-Conservative-Party as well. Which is why we have ludicrous tax rates, with a plan to ramp them up even higher and nothing in the country works.

    Because Socialism DOESN’T WORK and, as someone very wise who wasn’t a Blu-Green Socialist, explained “the problem with socialism is that you eventually run out of other peoples money.”

    And that’s the situation the Not-a-Conservative-in-Sight Sunak/Hunt shambles has created.

  11. Bloke
    February 25, 2023

    Just as Nature attracts, the UK needs an attractive tax rate to pull ahead.
    The force of pushing tax causes resistance and resentment.
    People are attracted to quality without high prices obstructing their access.
    Partners are freely attracted to each other, in love, business and a life of happiness.
    Those who feel forced into an unwanted relationship feel trapped, prefer to end it, or endure sadness throughout until going elsewhere.
    Low taxes inspire growth of better.
    We need a more attractive Chancellor and PM than the present rejects that negative Conservatives forces pushed on our formerly-great Party.

  12. agricola
    February 25, 2023

    We all know what is needed, but I doubt this government are sufficiently radical or conservative to bring it about.
    Equally I await monday to judge their handling of the NIP. Get it wrong and they will destroy the UK.

  13. Dave Andrews
    February 25, 2023

    A major part of the problem of hiking corporation tax rates is the government being prepared to do it. It’s not just the level it’s going to, but its volatile nature. Any business making calculations on investments are going to be turned away if they can’t trust the government.
    Even if the government U-turns on the rise in corporation tax, would companies still go ahead with an investment which they think is only worth it if the tax rate stays low? What if the government rows back and decides to put the rate up anyway?

  14. Michael Saxton
    February 25, 2023

    I completely agree with your logic Sir John. It is so frustrating to witness a Chancellor and Treasury so anti-growth especially as Mr Hunt is apparently a Conservative!

  15. formula57
    February 25, 2023

    Indeed “The UK is crying out for so much new investment and business” and also for a government that will promote those – and that we plainly do not have.

    The King would do well to sack Sir Starmer as Leader of the Opposition and appoint you in his place, for you do a more convincing job of opposing this rotten government through explaining its gross errors.

  16. Original Richard
    February 25, 2023

    “The Chancellor himself when a free man argued just this case.”

    Those in control know all of this, Sir John, but the aim is to de-industrialise the UK and impoverish us with high immigration and subject us to meagre supplies of expensive and intermittent energy coupled with forcing us by legislation to convert to useless heat pumps and evs controlled by smart meters using surge pricing and rationing.

    There is no empirical evidence for CO2 controlling the planet’s temperature, which has only risen by 0.13 degrees C per decade according to satellite data, and no evidence of worsening weather. We actually need more CO2 in the atmosphere to promote further the growth of food.

  17. hefner
    February 25, 2023

    About Sir John’s fifth paragraph, gov.uk (assets.publishing.service.gov.uk) has a series of ‘Forecasts for the UK economy – A comparison of independent forecasts’. It is published every month and has been available for years. Each of them presents GDP growth, RPI, CPI, Unemployment rate, Current account and PSNB, as produced by thirty-ish forecasting institutions, some City-, some non-City-based. Average and dispersion produced by the different forecasts are presented every month for all parameters.

    What is rather interesting is to look at them, say every month from mid-2021 to February 2023, and look at the results of these independent forecasters. And compare their averages month-by-month to what the OBR forecasts have been producing over the same period (not forgetting that it includes the Truss-Kwarteng ‘event’).

    And then wonder whether some here are not trying to generate a storm in a tea cup about the deficiencies of the OBR model: ‘If a man wants to drown his dog he first accuses it of having rabies’

    1. formula57
      February 25, 2023

      @ hefner – noted, although Sir John himself has given us more accurate forecasts than many of those you mention. If the others provide for free what the OBR produces, why are we paying for the latter?

      Forecasters have a herd mentality, typically relying upon the same expectations and supposing the same effects so it is usual for them to make comparable predictions. There is not often much merit in providing an outlying forecast, specially not if it turns out to be correct as the forecaster receives too much attention that can turn very sour when the next forecast is wrong.

      1. hefner
        February 25, 2023

        Have you looked at how the dispersion produced by the different forecasters vary from month-to-month? There are indeed months when there is much of an alignment between the forecasts (which would agree with your ‘herd mentality’ explanation) and others when it is not so. Now try figure out and relate these variations to the political situation.

    2. Original Richard
      February 25, 2023

      hefner :

      Noted the Government publishes a series of independent forecasts for the UK economy. The fact that only those of the OBR are considered by those in control of our economy demonstrates that we have policy led economic forecasting (aka modelling) just as we have policy led climate forecasting (aka modelling).

      1. hefner
        February 26, 2023

        Noted, but my point was that the OBR forecasts were not so different from/not out of the cloud produced by the independent forecasts. I would think it is understandable that the Chancellor relies on a forecast produced by a UK state ‘agency’ rather than on a forecast produced by this or that bank or other external/foreign financial institution.

  18. Diane
    February 25, 2023

    It is truly depressing to witness so much common sense being utterly wasted. “Follow Ireland” ….. who or perhaps from where, is the Chancellor taking direction that we shouldn’t, mustn’t or can’t. And as for where are all our skilled people, we have a population increased by millions in only a few years and more streaming in on an ongoing basis. Just what are these people doing or capable of doing. How many are here permanently, paying taxes & contributing. How many are largely living off the state. Is there any significant number who are not allowed, or who simply do not have the attributes to enter the world of work & business for reasons we may not be aware of. There is so much we don’t seem to know, monitor or care about. It is so sad too to hear daily now, that people, who we should be trying to hold on to, not least the doctors, are opting to go elsewhere because of what they see as very poor prospects.

  19. Bert Young
    February 25, 2023

    Get rid of Hunt , full stop . Without a significant change , we become – if we have not already become , a lost cause in world affairs . I’m fed up with the present situation as it is . Maybe a coalition arrangement is the only solution .

    1. Ashley
      February 25, 2023

      Get rid of Sunak too, he get everything wrong as Chancellor and is continuing with this as PM. No change no chance with Sunak as they correctly said of the foolish dope John ERM Major.

  20. Richard1
    February 25, 2023

    Unfortunately I think the mindset is it is essential at all costs to restore confidence after the truss debacle, which is what of course has also landed us stuck at -25% or so in the polls. The selection of Liz truss as leader has done immense damage to the cause of lower taxes and free markets. In the counter-factuals occasionally debated as to whether or not we are better off for Brexit, the tax regime must now unfortunately be placed clearly as evidence of a Brexit harm. Had we voted remain presumably Osborne or someone similar would have succeeded Cameron, we would never have had the truss debacle (promoted inter alia by the ERG) and the trajectory of lower business taxes would have continued.

    We are in last chance saloon to avoid a Labour govt now.

    1. Original Richard
      February 25, 2023

      Richard1 :

      It doesn’t matter which party is in power or who is the PM or indeed the tax regime so long as those in charge want to continue with the unnecessary, pointless and economically unachievable policy of Net Zero (now by 2030 we are told for our electricity) which will bankrupt us and leave us with 3rd world expensive, meagre and intermittent power. Note that the National Grid ESO Future Energy Scenario “Leading the Way” for 2050 shows no storage for when the (coal fired Chinese supplied) wind turbines and solar panels are not producing sufficient electricity. It will be surge pricing and rolling rationing (aka blackouts) controlled by smart meters which those in power call “demand management”.

  21. Ex-Tory
    February 25, 2023

    The CGT and dividend tax changes will damage growth too. With a reduced annual exemption and high inflation, CGT will be a tax on inflation pure and simple. Dividends will for most people be taxed hugely more than a few years ago. So again the message is that the government wants to kill off private investment.

  22. agricola
    February 25, 2023

    I read today that the Organisation for Economic Cooperation and Developement, OECD, a Paris based quango are planning a minimum 15% Corporation Tax level across as many nations as they can convince. Apparently they have convinced our Treasury. The question I would ask is, have they been instructed to open discussions with the OECD by our Chancellor. If he is not complicit, what are any unelected Treasury scribes doing having discussions with any organisation outside the democratic process. Questions you can ask the Chancellor in the HoC.

  23. Keith from Leeds
    February 25, 2023

    I go back to my recent comment. Please tell me, & your other correspondents, what vision do the PM & Chancellor have for the UK, other than depressing us with the current heavy tax system.
    Why does no one talk about reducing the cost of Government to make room for real tax cuts.

  24. Alan Paul Joyce
    February 25, 2023

    Dear Mr. Redwood,

    It might be fair to say the UK is crying out for just about everything. Everywhere one looks, there is only shortage or inadequacy. It seems the only thing we are not short of is politicians (and migrants but that is another story) who preside over this shambles.

    Investment is desperately needed in the UK and there could not be a worse time for a rise in corporation tax. However, lo and behold, a politician, no less than the Chancellor, rises to the occasion.

    This government is out of ideas and it may as well be out of power for all the good it is doing. But if anybody thinks that the other lot can’t do any worse, then just read the Leader of the Opposition’s five ‘national missions’ manifesto. It’s a real beauty; full of worthless pledges such as ‘raising standards everywhere’ and ‘a future built by everyone, everywhere’ laced, of course, with great big helpings of meaningless managerial-speak.

    Like I said politicians…..

  25. a-tracy
    February 26, 2023

    There is part of me that is glad there are shortages of perishables because lots of families waste and throw away so much because of the big packs the supermarkets pack them in. I always buy loose produce but too many people just pick up the big bags on offer then throw away. When I worked on a market stall selling fresh fruit and vegetables in my teens people used to buy smaller portions, e.g. quarter of a cucumber, just a couple to four tomatoes, 2lb of potatoes, half a cauli. If they ran out mid-week they’d stock up with fresh produce.
    Nothing went to waste on that stall, the cauliflower stalks cut off for demonstration purposes used to get bagged up and given to a small animal sanctuary. Over ripe tomatoes would get sold off low cost or cooked up into tomato sauce for pasta and bottled.

    Where I live I haven’t had any problems getting the fruit and vegetables, some are more expensive but I only buy what I’m definitely going to use anyway. Then again I don’t live in a quinoa area. What is all this alarmist reporting over every little thing, then it will blow over as suddenly as it is CRISIS headlines. Soon people will ignore an actual crisis is that the grand plan?

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