I’ve never been a big fan of excessive taxation on companies and low/middle earning individuals. Of course, we should all pay our fair share but the point is that the full benefits of taxation are only felt when you have a strong economy. And to have a strong economy, you need investment which is neatly correlated to corporation tax rates. The Brexit vote has sparked uncertainty. It is time the British government provides an incentive for wealthy individuals to inject their cash into the UK.
There are other ways too of creating jobs and encouraging investment. HS2 and a possible third runway at Heathrow are the obvious examples. But these huge infrastructure projects take time. And they require money. Lots of it. Yes, it is important that we continue with projects like these to assure investors that Britain can be a globally-renowned economy but they need something more definitive in the meantime to attract them here.
A competitive, dynamic economy is what we need right now. Not some repelling shambles of a country which does not appeal at all to foreign buyers and investors. Slashing corporation tax is the quick way to creating jobs and economic growth in the long-term. This will help to cement our economic position before going into turbulent negotiations with Brussels.
Some say that cutting corporation tax now would be like stabbing Europe in the back and giving them a reason to hinder us when it comes to our invoking of Article 50. I disagree. It will put us in a position of dominance and prevent us from being exploited by the ones who want Britain punished harshly for Brexit. If Britain is going to become a magnet for foreign investment, then Europe will have no choice but to strike a deal with us, whether they like it or not.
The Tories have already, rather dully, said that a budget surplus will not be achieved by 2020. This is one enormous pressure which has been lifted off us as a result of the Brexit vote. Reducing taxes now will have little negative effect but could be the difference in building a more prosperous future for the country or not. We need to get corporation tax to below 15% in order to make the UK look truly attractive.
With historically low interest rates and reduced corporation tax, Britain could become the ideal place to do business. Let’s not miss out on this opportunity.