Tories urged to rule out new corporation tax cut
shadow chancellor John McDonnell said the Tories needed to reject more “giveaways to big business”.
Labour has called on the Conservatives to rule out further cuts to corporation tax as Donald Trump’s administration revealed a tax plan which includes a reduction in the US top corporate rate to 15%.
If the US president succeeds in getting his proposals approved by Congress, it appears Theresa May would have to cut the UK’s rate further to meet her aim, stated in November, to have the lowest corporation tax in the G20.
Britain currently has a corporation tax rate of 19%, the lowest in the G20, and it is set to fall to 17% in 2020, which Chancellor Philip Hammond has said will send “the clearest possible signal that Britain is open for business”.
But despite the prospect of Mr Trump undercutting the UK rate, shadow chancellor John McDonnell said the Tories need to reject more “giveaways to big business”.
He also urged Mrs May to rule out raising taxes on low and middle earners, amid signals from ministers that the Tories could abandon their 2015 “tax lock” pledge not to raise income tax, VAT or national insurance.
Mr McDonnell told the Press Association: “When the Tories are not holding Trump’s hand in Washington they are sharing his policy agenda here in the UK.
“We already know the former chancellor (George Osborne) wanted to cut corporation tax to 15%, and the current Chancellor wants to potentially cut it further to turn our country into a tax haven.
“The Tories need to be straight with the British people and rule out further corporation tax giveaways to big business, as well as further tax hikes on low and middle earners.”