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25th May 2018
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Welcome to the
The UK budget, delivered on Wednesday by George Osborne MP, Chancellor of the Exchequer, was designed to improve the nation's competitiveness, encourage enterprise, promote growth and create jobs. My initial thoughts are that it will do the trick and it appears that most reputable business groups agree.
As Mr Osborne pointed out, many other countries have seen their ratings downgraded and their borrowing costs soar in recent months. Market interest rates in Greece are 12.5%, in Ireland they are close to 10%, in Portugal and Spain they are 7% and 5%.
"Today our country's market interest rates have fallen to 3.6%," he said. "We have a higher deficit than Portugal, Greece and Spain, but we have virtually the same interest rates as Germany.
"This is our powerful monetary stimulus to our recovering economy."
He said that while over the past decade, other nations have reduced their business tax rates, removed barriers to enterprise, improved education systems, reformed welfare and increased exports, the reverse has happened in Britain. As a result, we've dropped from 4th to 12th place in the global competitiveness league.
However, he also referred to the fact that The European Commission has recently published its growth forecasts. These show that the UK is forecast to grow more strongly in the coming year than Spain, Italy, France, the average for the Eurozone and the average for the EU.
Britain used to have the 3rd lowest corporate tax rate in Europe. It now has the sixth highest. Other countries are making their tax systems more competitive and attracting multi-national companies away from the UK but the Chancellor feels that the changes he's announced will give us a far more attractive system than France, America or Germany.
"I want Britain to be the place international businesses go to, not the place they leave," he said, announcing that from April this year corporation tax will be reduced not just by 1% as previously announced but by 2%. It will continue to fall by 1% in each of the following three years - taking our corporate tax rate right down to 23%.
"That's 16% lower than America, 11% lower than France and 7% lower than Germany - the lowest corporation tax rate in the G7," challenged the Chancellor.
25th March 2011