Labor Party to review UK corporate tax system

Labor will review Britain’s corporate tax system to make Britain the fastest growing economy in the G7, Shadow Chancellor Rachel Reeves will announce on Tuesday.

Reeves, speaking in London at the annual conference of Make UK, the trade association of British manufacturers, will say the review aims to find ways to boost business investment to boost growth.

Business investment spending in the UK has stagnated since around the Brexit referendum, while business investment has increased by 25 percent in France, 22 percent in the US and 7 percent in Germany over the same period, according to official figures.

Sir Keir Starmer last month outlined five key ‘missions’ for the next Labor government, including aiming for the UK to become the fastest growing economy among the G7 countries.

Reeves blamed “uncertainty and political instability” for the underinvestment of British companies and accused the government of a “chaotic approach in the eleventh hour”.

Business groups have complained that when UK corporation tax rises from 19 per cent to 25 per cent in April, the government’s two-year investment ‘super deduction’ scheme, which offers 130 per cent tax breaks on equipment purchases, is about to apply expired.

Groups including the CBI employers’ association on March 15 called for new tax breaks in Chancellor Jeremy Hunt’s budget to boost business investment.

Reeves will slam the super-deduction scheme as a “short-term solution,” but will say that if the government uses the budget to unveil an investment boost and it’s affordable, “we will support it to help get our economy back.” grows “.

Reeves will say that the corporate tax “has been up and down like a yo-yo. . . No wonder companies can’t plan and our investment rates are exploding.”

Greg Hands, leader of the Conservative Party, said the corporate tax rate, at 25 percent, is still lower than at any point during the last Labor government when the levy averaged 29.6 percent.

Meanwhile, Make UK Chief Executive Stephen Phipson will reiterate his call for the government to present an industrial strategy to boost growth.

Phipson will also urge the UK to improve political and trade relations with the EU.

A Make UK survey found that almost half of UK manufacturers said EU suppliers were more cautious about sending goods to them compared to a year ago.

The survey also found that 40 per cent of manufacturers have increased their use of UK suppliers over the past year, with a similar proportion saying they will do so over the next 12 months.

Phipson will say: “We need to reset our political and trade relations with the EU, which are marred by such resentment.”