Labour announces business tax review to end Tory “11th hour approach”
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As part of Labour's mission on growth, party announces business tax
review to end Tory “11th hour approach” hampering growth and
investment Shadow Chancellor Rachel Reeves today (Tuesday)
announces Labour will carry out a review on the business tax regime
– one focused on providing certainty and boosting investment, as
part of driving forward the party’s mission of securing the highest
sustained growth in the G7. Giving a speech at MakeUK's annual
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As part of Labour's mission on growth, party announces business tax review to end Tory “11th hour approach” hampering growth and investment Shadow Chancellor Rachel Reeves today (Tuesday) announces Labour will carry out a review on the business tax regime – one focused on providing certainty and boosting investment, as part of driving forward the party’s mission of securing the highest sustained growth in the G7. Giving a speech at MakeUK's annual conference in London in front of an audience of close to 1000 senior leaders in the manufacturing sector, she is expected to outline one of the key problems with the economy under the conservatives: a lack of business investment, fuelled by uncertainty and political instability. She is expected to slam the chaotic “11th hour approach” of the government pointing towards 22 changes to corporation tax in this parliament, and a lack of clarity on the successor to the super-deduction which is due to end next month. Investment in Britain is suffering under this regime, because major capital projects have long lead-in times so the generosity of capital allowances changing from year to year creates huge uncertainty in which to plan investment. Not only that, but the Tory regime is disincentivising investment in the UK, with OBR figures that show the super-deduction tax relief now costs the taxpayer more than the investment it brings into the UK economy. The party is expected to flesh out more details on the scope of the review as well as the figure that will lead it in the coming months. The review will look at:
Businesses have raised concerns about the government’s current approach. BT said that a temporary measure like the super-deduction “was never likely to shift the UK permanently out of its relative low-investment position.” Trade bodies including MakeUK have also been calling for urgent clarity on the scheme. The IFS say on the government’s business tax regime, that “some stability would be nice” and have called for a plan so “that companies and investors can use a credible guide to what to expect in the future.” Reeves will outline how a Labour government will approach business taxation, focused on incentivising investment, boosting productivity growth across the country, and building that mission on the rock of economic stability. Speaking at the MakeUK Conference, Rachel Reeves is expected to say: “When I meet business leaders, as well as a determination to succeed what I also hear, time and again, is a deep sense of frustration. “Frustration that for all that hard work and creative talent, for all the potential that exists in this country, too much is being squandered amidst political dysfunction and economic instability.” Talking about how a more stable business tax regime will help Labour achieve its growth mission, Reeves will say: “Central to a mission based approach – central to strong investment – are stability and certainty in place of chaos and an 11th hour approach that hampers investment and growth. “Nowhere is that clearer than in our tax system. “In recent years, corporation tax has gone up and down like a yo-yo while the government has papered over the cracks with short-term fixes like the super-deduction. “So it’s no wonder businesses are unable to plan and our investment rates are cratering. “The answer is not unfunded tax giveaways – we’ve seen where that takes us. “But Labour knows that there is a role for the tax system in supporting investment. “As Chancellor, I will put an end to that uncertainty by providing stability in business taxation and so today I can announce that Labour will do a review of the business tax regime. “The review will look at how we can build more stability for businesses in the tax system, and drive that crucial investment forward. “And as we await next week’s budget, let me say this: “We will look closely at what the government proposes on capital allowances in that budget; “And I am urging the government to show they understand the need to support business investment as part of that. “If the government brings forward a genuine boost to investment and if it is affordable, we will back it to help get our economy growing again. “But stop-go tax policy is only a sticking plaster. What businesses need are certainty, consistency and incentives for investment. Labour will provide that.” Ends Notes to Editors
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