Hunt insists he wants ‘most competitive’ business taxes ahead of looming hike
The Chancellor is under pressure from Tory MPs to scrap a planned increase in corporation tax from 19% to 25%.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Chancellor Jeremy Hunt said he wanted Britain to have “the most competitive business tax rates” as he faced calls to scrap a planned hike in corporation tax.
Ahead of the Budget on March 15, Mr Hunt said the increase in the main rate from 19% to 25% due in April would still leave the UK with a lower rate than “nearly all” major rivals.
The Chancellor said he wanted to lower the tax burden on businesses, but “it’s not something we’re going to be able to do all in one go”.
Mr Hunt was speaking to Tory MPs Esther McVey and Philip Davies in an interview for their GB News show to be broadcast on Saturday.
Former Cabinet minister Ms McVey asked him if he was “embarrassed, ashamed” to have “the highest levels of taxation in modern history”.
The measures in the Chancellor’s autumn statement in November saw the tax burden rise to its highest sustained level since the Second World War.
Mr Hunt said “it’s not what I want at all”, but he needed to demonstrate a responsible approach to the public finances.
I want to bring down personal taxes, because that is at the heart of what being a Conservative is, but I want to bring down business taxes even more
He added: “But if you’re saying to me, as a Conservative Chancellor, do I want to bring down taxes? Well, I want to bring down personal taxes, because that is at the heart of what being a Conservative is, but I want to bring down business taxes even more.”
The Chancellor is under pressure from prominent Tories – including former prime minister Boris Johnson – to slash corporation tax rather than hike it by almost a third.
But Mr Hunt played down the importance of the headline rate of corporation tax, saying the focus should instead be on the effective rate, taking into account the allowances open to firms to reduce what they actually pay in tax.
But he added the headline rate “even at 25%, is lower than nearly all our major rivals… France, Germany, and so on”.
Mr Hunt, who pushed for a 15% rate during his 2022 Conservative leadership bid, told the Tory MPs “I want our tax rates to be the most competitive”, but “we can’t get there all in one go”.
Economic stability and a responsible approach to the nation’s finances were needed to lower inflation, he said.
“But if you’re saying to me: is it my ambition for us to have the most competitive business tax rates? Do I want to make progress? Yes, I do.”