Truss blasts Hunt for ‘driving business away from Britain’

JEREMY Hunt’s decision to raise corporation tax will drive business away from Britain, Liz Truss warned yesterday.

In a pointed intervention, the former prime minister reignited the simmering Tory row, saying the Treasury would ‘lose revenue’ when it increases corporation tax from 19 per cent to 25 per cent next month.

She highlighted pharmaceutical giant AstraZeneca’s recent decision to build a £320million factory in Ireland rather than the UK – and predicted more firms would follow.

A spokesman for Ms Truss said: ‘Liz was always clear that you can’t deliver economic growth and thus reduce borrowing by hiking taxes.

‘Raising corporation tax from 19 per cent to 25 per cent looks like a pretty bad mistake right now when you consider how a firm like AstraZeneca is locating its new plant in Ireland where corporation tax is half the rate now being levied by the British Government. The Treasury looks like it will lose revenue as a result of that decision.’

Her comments came after the Chancellor told MPs he was forced to clear up the ‘mistakes’ made by Ms Truss and Kwasi Kwarteng in their ill-fated miniBudget last September.

He told the Commons Treasury committee: ‘There were some mistakes in the mini-Budget which we had to reverse. In particular, it’s clear you can’t fund tax cuts through increased borrowing so that is a clear thing that we changed course on.’

Mr Hunt has voiced his ‘disappointment’ at AstraZeneca’s decision to build in Ireland. But yesterday he insisted the UK remained an attractive place to invest with a corporation tax rate that is still the lowest in the G7.

One senior Tory voiced surprise at Ms Truss’s intervention, pointing out that she appointed Mr Hunt and agreed the corporation tax move as she tried to cling on in the dying days of her administration last October.

But last night it threatened to reopen the Tory debate on tax.

Mr Hunt acknowledged that the tax burden was heading for a postwar record. But he said this was driven by the huge costs of dealing with Covid and helping families and businesses with energy bills.

He said the Conservative approach was to ‘bring down taxes when we

‘A pretty bad mistake’

can’. But he said there was no money for immediate tax cuts.

‘As a proportion of GDP I accept that following a once-in-a-century global pandemic and a once-in-ageneration energy crisis... I accept the tax burden has gone up for the moment,’ the Chancellor said.

‘ But I want to bring it down and that is why the focus in the Budget was unlocking our longterm economic growth rate through addressing labour supply and business investment.’

Mr Hunt defended his commitment to freeze tax thresholds for six years, saying it was a ‘better way’ to raise money than increasing headline rates.

But he acknowledged the tax system was ‘far too complex’, and vowed to simplify it, despite a decision last year to scrap the Office for Tax Simplification.

Mr Hunt said: ‘Taxes are far too complex and there is a huge job to do to make them more simple. I will continue to make sure, in as far as I am able, in every fiscal event to try to make progress on tax simplification.

‘I am happy to take that as a personal responsibility rather than have a separate group of people who are funded to do that.’