Daily Mail

...as Hunt still refuses to cut business levy

- By Archie Mitchell Business Correspond­ent

JEREMY Hunt faced a backlash from backbench Tories and business leaders yesterday after confirming he would press ahead with controvers­ial plans to increase corporatio­n tax next month.

The Chancellor defied calls to scrap the rise, which will take the levy from 19 per cent to 25 per cent from April 1.

Critics have warned the higher rate will drive investment away from Britain and stifle economic growth.

Mr Hunt said he wanted the UK to have ‘the most pro-business tax regime’ in the world, and offered tax breaks for firms that invest in IT, factories and machinery.

But the Chancellor’s news that he would boost corporatio­n tax prompted the accountanc­y firm PwC to warn that it would leave Britain ‘somewhere short’ of the ‘most pro-business environmen­t’.

Conservati­ve MPs and business chiefs slammed the decision, renewing calls for the Government to reconsider the benefits of the increase.

Jacob Rees-Mogg described Mr Hunt’s refusal to change course as ‘a mistake’. The former business secretary said putting up the tax will hit firms and lead to less income for the Treasury longer term.

Former Tory leader Sir Iain Duncan Smith said the Chancellor ‘will have to return to the tax’, which he said would deter investment from internatio­nal firms.

Sir Iain welcomed moves to offset the tax with investment incentives, but said it would have been ‘better to just reduce corporatio­n tax’, adding: ‘The problem is this is a headline rate which companies look at when deciding whether they are investing in the UK full stop.’

Ex-home secretary Priti Patel also urged the Chancellor to keep the level of corporatio­n tax ‘under review’.

Former trade secretary Sir John Redwood said the UK was moving in the opposite direction on corporatio­n tax to rivals such as the US. He said Ireland, where corporatio­n tax is just 12.5 per cent, proved that a lower burden on business could lead to higher revenues for the Government by boosting growth.

Ex-minister Ranil Jayawarden­a said that in coming years: ‘We should revisit corporatio­n tax. Any increase will make us less competitiv­e, reduce investment in the long run, stifle job creation, all of which are required for growth.’

Advertisin­g mogul Sir Martin Sorrell praised Mr Hunt’s ‘creative’ budget, which he said would reduce inflation, cut the national debt pile and boost investment.

He said the Chancellor could still cut corporatio­n tax ahead of the next general election, adding: ‘Not a bad short-term economic and political strategy.’

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