Chancellor Jeremy Hunt should resist Tory MPs’ “siren” calls to slash corporation tax when he delivers his Budget next week, Labour urged today.
Shadow Chancellor Rachel Reeves called on the Cabinet Minister to push ahead with hiking the rate from 19% to 25%.
She also claimed Britain was ready for “boring government” after years of Conservative chaos and turmoil.
Tory backbenchers want the Chancellor to scrap or delay the planned hike in corporation tax due to take effect from April.
But, speaking at the Make UK manufacturing industry conference in Westminster, Ms Reeves said: “We still will have the lowest corporation tax in the G7 so I would resist, if I was the Chancellor, the siren calls from some in his party to cut corporation tax.
“But instead, if there is money available, to use that to hand support and incentives for investment - but not just for one year or two years but have stability, because investment decisions aren’t things you can switch on and off, while the Government moves business taxation up and down like a yo-yo.”
Ms Reeves ordered a review of business taxes - but signalled corporation tax would not be cut under Labour.
“We are doing a review to look at all these things but we know that resources are scarce so when it comes to the Budget next week, the Chancellor … can choose between cutting corporation tax or providing incentives for businesses to invest,” she told the Mirror.
“I think the priority should be on providing those incentives.”
Addressing industry chiefs, she also suggested the UK would welcome a period of “boring” government after years of uncertainty - shown by Britain having three PMs, Boris Johnson, Liz Truss and Rishi Sunak, in 2022.
“We want to provide the stability - you may say it is boring but I think most businesses here would say they fancy a bit of stability after the last few years of chaos and confusion and political instability; three prime ministers, four chancellors, four budgets in just one year,” she said.
“It’s sort of a joke but it’s not funny for businesses who are trying to make long-term decisions.”
Ms Reeves also promised Labour would “fix the holes” in the UK’s Brexit deal with the EU to make it easier for firms to export to the Continent.
Opening the conference, Make UK chief executive Stephen Phipson warned the “domestic political chaos of the last 12 months” had caused “such damage to the reputation of the UK with our main trading partners”.
He told guests: “While the unity of the response towards Ukraine has eased some of the tensions with the EU, the political mismanagement of our economy and, damage to the reputation of the UK as a partner on such a grand scale, together with the disregard of the rule of law in our political system cannot continue."
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