Slash taxes… it worked for me!’ Ex-Chancellor George Osborne joins calls for Jeremy Hunt to curb rise in corporation tax at the Budget
- Mr Osborne warned planned rise in corporation tax could drive investment away
- Current Chancellor Jeremy Hunt has said not to expect tax cuts in spring Budget
- Backbenchers are pushing Mr Hunt to reduce burden on business for growth
Former chancellor George Osborne yesterday joined the calls for Jeremy Hunt to cut taxes for business to stimulate growth at next month’s Budget.
Mr Osborne warned that the planned rise in corporation tax from 19 to 25 per cent in April could drive investment and companies away from the UK.
The current Chancellor has told Conservative MPs not to expect tax cuts in the spring Budget, but many backbenchers are pushing for Mr Hunt to reduce the burden on business to drive growth.
Mr Osborne, who served as chancellor from 2010 to 2016, has now weighed in, saying he would cut business tax to fund public services if he was back in charge. He told BBC Radio 4’s Today programme: ‘Of course, it’s more popular to increase taxes on business than on individuals and in some ways easier to do than trying to cut public spending.
‘However the reason that I reduced business taxes was to attract investment and attract research and attract companies like AstraZeneca, and if you put up taxes then you will potentially have the opposite effect.’
Mr Osborne warned that the planned rise in corporation tax from 19 to 25 per cent in April could drive investment and companies away from the UK
Asked if Mr Hunt should reverse the planned corporation tax increase or make other cuts, Mr Osborne said he was a ‘big supporter’ of the Chancellor and Rishi Sunak, adding: ‘I think it’s fantastic we have grown-ups in Downing Street again.
‘They are more than capable of making their own decisions, but all I can say is that when I was in No 11 I reduced business tax because I thought that was a way of bringing investment in, that creates the revenues that allows you to fund your public services.
‘That is the approach I took and it would be the approach I would take again.’
Mr Osborne also urged the Government to increase devolution.
‘The Northern Powerhouse has gone from strength to strength over the last decade and there’s real devolution in cities like Greater Manchester, but we should double down on that,’ he said.
‘And frankly neither the Conservative Party nor the Labour Party have grabbed the prize that lies in front of a really, really substantial further act of English devolution.’
The former chancellor’s intervention comes as a caucus of Tory MPs – mostly Liz Truss’ allies – are preparing a low-tax manifesto.
The current Chancellor has told Conservative MPs not to expect tax cuts in the spring Budget, but many backbenchers are pushing for Mr Hunt to reduce the burden on business to drive growth
The alternative statement, set to be presented to Mr Hunt by the Conservative Growth Group (CGG), is said to have the support of most Conservative MPs.
Mr Hunt has continued to resist calls from his colleagues for the Treasury to ease the burden on the average taxpayer in the Budget.
Last week the Chancellor said: ‘We want to bring taxes down.
‘But the only tax cut we won’t consider is a tax cut that’s funded by borrowing.
‘Because all that does is lead to higher interest rates, which creates another pressure.’
The alternative budget will call for Mr Hunt to ditch the rise in corporation tax from 19 to 25 per cent and eliminate VAT on energy bills.