A report suggesting the UK should cut its tax from 19% to 12.5% has been backed by a range of potential future prime ministers.
The Onward think-tank published its report Firing on all cylinders yesterday, which outlines a “trickle-up” economic approach would see corporation tax lowered and other taxes cut.
Amongst those backing the proposals were Michael Gove, Jeremy Hunt, Sajid Javid, Esther McVey and Matt Hancock.
“Ireland has used low corporation tax to attract huge amounts of inward investment as part of a conscious policy to raise national productivity. While UK corporation tax is scheduled to fall to 17% in April 2020, Ireland’s rate, at 12.5%, remains substantially lower – although compared to 2010 it is now within striking distance,” the report said.
The report, authored by Neil O’Brien, Conservative MP, said: “There is currently some scope to cut taxes and increase spending in a prudent way in the near term while keeping debt as a share of GDP falling.”
The report argues that after nine years of austerity the government should prioritise investment in public services over reducing the public debt.
The new approach, the report said, would free up funds to be invested in key public services including police, prisons, adult and children’s social care and schools.
Onward’s report suggests that the 2019 Spending Review should return school funding to 2015 levels and provide cash for sustained recruitment into the police budget.
Environment secretary Michael Gove said: “This report will kick start a debate the party needs to have,” and former work and pension secretary Esther McVey said: “The priorities set out in the report are precisely the ones that most people will recognise.”
Home secretary Javid said the report is an “important contribution” while foreign secretary Hunt called it “inspiring”.
