Former Conservative ministers brand the Government’s upcoming corporation tax rise a ‘historic mistake’ in a fresh attack on the plans
- Jacob Rees-Mogg, Kit Malthouse and others calling for rise to be reconsidered
- Mr Rees-Mogg branded it the ‘most damaging part’ of Jeremy Hunt’s budget
Senior former Conservative ministers yesterday launched a fresh attack on the upcoming rise in corporation tax, describing it as a ‘historic mistake’.
Jacob Rees-Mogg and Kit Malthouse were among those urging the Government to reconsider the increase from 19 per cent to 25 per cent coming in later this month during a Commons debate, amid fears it will feed inflation, while Priti Patel also voiced concerns.
Mr Rees-Mogg, who briefly held the post of business secretary under Liz Truss, branded it the ‘most damaging’ part of Chancellor Jeremy Hunt’s Budget.
It follows an intervention from Ms Truss last month, in which the former prime minister said the Treasury would ‘lose revenue’ when it increases corporation tax for firms with profits of over £250,000.
Mr Rees-Mogg last night told MPs that setting corporation tax at 25 per cent was a ‘historic mistake’.
Senior former Conservative ministers yesterday launched a fresh attack on the upcoming rise in corporation tax, describing it as a ‘historic mistake’. Pictured: Chancellor Jeremy Hunt
Jacob Rees-Mogg (pictured) last night told MPs that setting corporation tax at 25 per cent was a ‘historic mistake’
He said: ‘It is a major blunder being made by His Majesty’s Government, and it fails politically, and it fails economically.’
He added: ‘Increasing corporation tax from 19 per cent to 25 per cent at a period when there is inflation in the system already is actually going to make things more inflationary.
READ MORE: ‘How much can business take?’ Industry chief demands planned corporation tax hike from 19 to 25% in this month’s Budget is scrapped
‘What we are doing at the moment is risking shrinking the economy, encouraging businesses to leave and go and set up elsewhere, and not having the money that we need for public services.’
And Simon Clarke, the former Chief Secretary to the Treasury, said it was ‘absolutely imperative that we lower our corporation tax rather than raise it’.
Former education secretary Mr Malthouse urged the Government to review the headline rate and thresholds of the tax on businesses.
And Ms Patel, the former home secretary, also aired concerns about the long-term impact on domestic businesses.
She said: ‘I do feel this new tax risks placing very significant compliance costs on British businesses that are already paying well above the minimum 15 per cent tax rate.
‘We do have to recognise, of course, there are current pressures and these costs will feed on to consumers.’
Former education secretary Kit Malthouse (pictured) urged the Government to review the headline rate and thresholds of the tax on businesses
Former home secretary Priti Patel (pictured) also aired concerns about the long-term impact on domestic businesses
But Treasury minister Victoria Atkins defended the corporation tax rise, telling MPs: ‘The rate increase which took effect from this year and which this Bill maintains for financial year 2024 is forecast to raise over £85 billion in the next five years.
‘That will of course make a vital contribution to ensuring that our debt continues to fall as part of the Prime Minister’s five pledges, whilst also allowing us to continue to invest in our much cherished public services.’
She also said the UK was joined by the likes of Germany, Spain and Japan in introducing internationally-agreed corporation tax rules.
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