The Notebook: John O’Connell on corporation tax, rail subsidies, and dangerous books
The Notebook is where interesting people say interesting things. Today, it’s John O’Connell, the chief executive of the TaxPayers’ Alliance, who riffs on corporation tax, 4.99 per cent council tax hikes and the books that have a little more spice than they used to
The economy is doing slightly better than expected. Which, to be fair, might not be saying much. But it has led to calls for the Chancellor to loosen its iron grip on families and businesses in next month’s Budget. Senior Conservative MPs, alongside fresher faces in the Conservative Growth Group, think this is a good moment to drop the planned increase in corporation tax from 19 to 25 per cent. After all, an investment shortage – and the resulting lack of productivity growth – lies at the heart of our economic woes; increasing a profits grab is the wrong move, so the argument goes.
The government was quick to squash this idea over the weekend, given the Prime Minister’s big pledge is to halve inflation by the end of the year – even though it’s doubtful how much control the government has over that particular aim.
But they might do well to keep an open mind. While Treasury civil servants may feel that our successive cuts to the headline rate of corporation tax from 30 to 19% per cent did little to stimulate investment, Chancellor Jeremy Hunt himself perhaps doesn’t agree. Let’s remember, it was he who had the punchiest of pledges on corporation tax during the Conservative leadership campaign last year, calling for a headline rate of 15 per cent.
In any case, it’s easy to look across the Irish Sea for a counter-view. AstraZeneca last week announced that it would locate a new manufacturing plant in Ireland rather than the UK. While there will be more than one reason for this decision, Sir Pascal Soriot made it abundantly clear that the UK’s “discouraging” tax regime was a contributing factor.
The European Commission forecasts heady growth rates of almost 5% for Ireland this year. We should be so lucky – anything above zero is a big win for the UK at present. Perhaps the government ought to consider giving the economy a little more room to grow.
COUNCIL THAT
Talking of taxes, it has emerged that 75% of county councils are planning to hike council tax as much as they can without triggering a local referendum. Of the 113 councils who have declared their intention to raise their rates, 84 have chosen to increase them by the maximum 4.99 per cent. This equates to an extra £100 per year for the average band D property. Three councils have special dispensation to hike by even more – dodging a referendum – including Thurrock, which lost a bob or two on some property speculations. Perhaps better to focus on frontline services…
OUTTA HERE
The Department for Business, Energy and Industrial Strategy was split into four as part of a bigger reshuffle. How much will it cost? The Lib Dems reckon it’ll be £60 million, with other estimates closer to £100 million. Why not relocate officials in the new departments out of London? We’ve estimated that £371 million of savings can be found by moving 53,196 civil servants elsewhere. Encouragingly, Kemi Badenoch’s department will have a renewed focus on growth – which, if achieved, can help bring down those sky high tax bills.
CAN I QUOTE YOU ON THAT?
It’s truly amazing what we’re pulling off, by the way
The BBC’s boss Tim Davie is right about the licence fee, with polls suggesting it’s among the country’s least popular levies
DANGEROUS MINDS
Leviathan by Thomas Hobbes. John Locke’s Two Treatises of Government. Edmund Burke’s Reflections on the Revolution in France. 1984 by Orwell. All great works, that surely don’t need yet another recommendation.
Although, if you were to pick up any of these works you could find yourself on the government’s naughty list. According to reports, the Home Office-run Prevent Programme flagged some classic texts under its Research Information and Communications Unit as opening the door to extremism.
It didn’t stop there. Terrifying TV programmes such as The Thick Of It and Great British Railways proved troublesome for the bureaucrats.
And that’s to say nothing of the attempts to rewrite classic Roald Dahl stories.
Maybe you’ve already read and watched all of the above. But surely they are self-recommending now they have a new edge.