Hunt: We want to reduce business taxes

JEREMY Hunt said yesterday he wants to ‘bring business taxes down’ and make the economy ‘more competitive’ after it narrowly avoided recession.

National output flatlined in the final quarter of 2022 – but defied forecasts from bankers and economists that it would slip into negative territory.

The figures come at a time when pressure is growing on the Chancellor to introduce tax cuts in next month’s Budget.

This week the boss of pharmaceutical giant AstraZeneca criticised the high cost of doing business in the UK.

Sir Pascal Soriot said that ‘discouraging’ taxes levied by the Treasury were behind the firm’s decision to build a £330million factory in the Republic of Ireland rather than north-west England.

Ireland’s corporation tax rate is 15 per cent, one of the lowest in Europe. The UK charges 19 per cent but this is due to rise to 25 per cent at the start of April.

When asked about AstraZeneca’s decision, Mr Hunt said he was ‘disappointed we lost out this time’ but agreed with the ‘fundamental case’ the company had made.

‘We need our business taxation to be more competitive and we want to bring business taxes down,’ he said.

Despite this, the Chancellor refused to consider tax cuts that would be funded by debt. ‘The only tax cuts we won’t consider are ones that are funded by borrowing because they’re not a real tax cut. They’re just passing on the bill to future generations,’ he told the BBC.

Official figures showed the economy saw zero growth in the final three months of last year as strikes and rising living costs took their toll. That was enough for the UK to avoid recession, defined as two consecutive quarters of decline. The economy shrank by 0.2 per cent in the third quarter.

DESPITE endless predictions that we are hurtling into recession, Britain has defied the prophets of doom.

True, flatlining growth for the last quarter of 2022 announced yesterday is hardly a cause for rejoicing. But neither does it signify a nation on the edge of bankruptcy.

Within those figures, it was the strikebound public and transport sectors which performed worst, notably health and education services, which contracted by 2.8 and 2.6 per cent respectively.

For pubs and restaurants, however, card receipts were back above pre-pandemic levels – hard evidence that not everyone in this country is on the breadline.

However, it would be foolish to deny that the economy remains on a knife-edge. Without strong government action, it may yet slip into recession.

The Mail welcomes Jeremy Hunt’s promise to bring down taxes, but when? Unless he starts soon, a tipping point will be reached and many more big companies will desert these shores for more liberal and far-sighted fiscal regimes.