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Tories Challenge Brown To Cut Business Tax

by Jason Gorringe,, London

20 March 2007

As UK budget day draws near, pressure is mounting on Chancellor of the Exchequer Gordon Brown to reduce the burden of tax and regulation on business after the Conservative Party, the main opposition party, challenged him to cut corporate tax by 3% to reverse the country's falling tax competitiveness.

Speaking in advance of the Chancellor's Budget statement, Shadow Chancellor George Osborne promised that that if the Labour government refuses to act, the Conservatives, if elected, would ease the tax pressure on industry and commerce as part of sweeping plans to simplify the UK's complicated business tax structure.

The Shadow Chancellor pledged to pay for a reduction in Corporation Tax from 30% to 27% - costing around GBP4.5 billion - by phasing out many of the complex capital reliefs available within the system.

"British businesses are suffering from the double burden of high business tax rates and the most complex tax system in the developed world. That puts British jobs at risk, harms our competitiveness, and ultimately contributes to the falling living standards we are now witnessing," Osborne stated.

"Wednesday's Budget is an opportunity to move to a lower, simpler business tax system. The detailed work we have done for more than a year shows that a 3p cut in headline corporation tax rate could be paid for by scrapping some of the complex reliefs and reducing expensive allowances. In other words, this would be a welcome simplification of taxes rather than an overall cut in tax," he claimed.

Meanwhile, the Conservatives have published a comprehensive list of what they have dubbed Gordon Brown's 'stealth tax' rises since 1997.

"In 10 years Gordon Brown has stealthily raised taxes 99 times," Osborne continued. "On past form we will see stealth tax rise number 100 in the Budget on Wednesday. These 99 stealth tax rises have made our economy less competitive and hit family incomes hard. They are part of the reason people are feeling the pinch as our real living standards fall."

"Even more depressing than the fact that we will see stealth tax number 100 from Brown on Wednesday is that so many people look at the state of our public services and ask the question: where has all my money gone?" he concluded.

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