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Jeremy Hunt has been warned that he has not gone far enough in creating a low tax economy and using Brexit freedoms. The shot across the bows from former Home Secretary Priti Patel came after the Chancellor resisted pressure from the Conservative backbenchers to cancel his planned 6p rise in Corporation Tax.<\/p>\n
Instead, he has brought in a new \u00a39billion tax break to incentivise investment.<\/p>\n
Tory MPs had been pressing him and the Prime Minister to cancel the hike which was first proposed by Rishi Sunak when he was Boris Johnson’s Chancellor last year.<\/p>\n
While Liz Truss and Kwasi Kwarteng cancelled it in her 49-day government, Mr Hunt rapidly reintroduced it to calm the markets.<\/p>\n
But the issue had become totemic among Conservative MPs who believed it was stifling growth and could cause a recession.<\/p>\n
AstraZeneca recently became the latest of many countries to decide to locate its headquarters elsewhere because of the threat of the tax rise.<\/p>\n
However, the Chancellor has refused to budge.<\/p>\n
Speaking in his Budget today Mr Hunt said: “Even at 19 percent our corporation tax did not incentivise companies at the right level.”<\/p>\n
He insisted that the UK would still have the lowest rate in the G7.<\/p>\n
And he announced a new scheme which allows companies to take every pound they invest in new equipment and machinary to take off the rate.<\/p>\n
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But Ms Patel, who has been working with the grassroots Conservative Democratic Organisation critical of Rishi Sunak, said his measures need to go much further.<\/p>\n
She told Express.co.uk: “The economic freedoms that deliver growth, prosperity and jobs need to be built on the foundations of a low-tax economy.<\/p>\n
“The measures announced to support investment and reforms to capital allowances are welcome and will stimulate the economy.<\/p>\n
“Further reforms are needed to boost our competitiveness and the Government must scrap its plans to implement a global minimum corporate tax as that restrains our economic freedoms and look to bring down corporation tax rates in the future.<\/p>\n
“Lower taxes empower families and businesses and this Budget has many welcome measures.<\/p>\n
“The changes to capital allowances, the freeze in fuel duty and the abolition of the lifetime allowance will make a positive difference to the economy.<\/p>\n
“The Chancellor can go further to promote our economic freedoms and competitiveness by scrapping the planned introduction of the global minimum corporate tax and halting the long-term rise in corporation tax.”<\/p>\n
Another Tory backbencher who represents a Red wall seat said: “The corporation tax measures will help in my constituency but I’m afraid overall we need to see the detail of the Budget before I can be positive or negative about it.”<\/p>\n
However, it appeared that Conservative strategists were even caught cold by the announcement.<\/p>\n
They had put out a Corporation Tax tweet suggesting that the rate would increase to just 21 percent before deleting it.<\/p>\n
While most Tory MPs cheered his announcement many looked angry.<\/p>\n
Former Home Secretary Priti Patel had led the push for the Corporation Tax hike to be reversed.<\/p>\n
She gave a partial welcome to the announcement but warned it would not cover all businesses.<\/p>\n
She said: “The \u00a39billion is welcome but it will be tapered details to be confirmed so it won\u2019t cover all business.”<\/p>\n
The Brexiteer Bruges Group warned: “Increasing corporation tax to 25 percent reduces the UK\u2019s competitiveness and sends a clear signal to investors that they\u2019re better off spending their money elsewhere.<\/p>\n
“It is a move which the government will come to rue. We should be cutting corporation tax to attract capital.”<\/p>\n