A Conservative former minister has suggested the majority of Britons are economically illiterate for supporting the chancellor’s corporation tax increase.
Sir Christopher Chope criticised the move to raise the tax on company profits from 19% to 25% from 2023, suggesting it was a policy which had more in common with those proposed by former Labour leader Jeremy Corbyn.
A YouGov snap poll published in the wake of Rishi Sunak’s Budget, involving 3,021 adults, found 69% support the corporation tax rise for businesses earning a profit of more than £250,000.
Speaking during the second day of the Budget debate, Sir Christopher told the Commons: “The fact that 65 out of every 100 people questioned liked the increase in corporation tax illustrates the extent of the economic illiteracy that sadly abounds.
“If that is really what the public wants, then Jeremy Corbyn would have won the general election with a landslide with his promise of an even larger corporation tax rate of 26 pence in the pound.
“The Office for Budget Responsibility believes that the consequences of the change in corporation tax will be an increase in the cost of capital, reduced business investment and that will in turn lead to lower productivity and lower wages.
“So the question I hope that the frontbench will answer later on is why did the Chancellor not listen to people like Sir Paul Marshall, an extraordinarily successful wealth creator who sits on the Government’s own industrial strategy advisory council? He has argued for a post-Brexit corporation tax strategy which is globally competitive and attracts inward investments.”
Later in the debate, Conservative MP Gagan Mohindra suggested the Treasury should look at “wholesale reform” of business rates to help protect city centres and high streets.
He added: “Covid-19 has accelerated the change in our working and buying habits.
“I’d urge the Chancellor to grasp this opportunity for tax reform to ensure that all businesses have a level playing field.”