LABOUR threw another bone to big business today with a pledge to keep corporation tax at 25 per cent or lower throughout the next parliament.
Speaking to corporate leaders, shadow chancellor Rachel Reeves said there would be no increases in the tax rate, presently 25 per cent, because businesses wanted “certainty.”
She did not exclude the possibility, however, that the rate could be cut if necessary to stimulate investment.
Almost unnecessarily, she added: “We will campaign as a pro-business party, and we will govern as a pro-business party.”
The move comes just a day after Ms Reeves assured bankers that she would not reimpose the cap on their bonuses, recently lifted by the Tories.
Left campaign group Momentum pointed out that “the UK has the lowest corporation tax in the G7.
“Meanwhile our public services are battered and starved of funds. Starmer and Reeves cosying up to big business is bad policy and bad politics.”
And Tax Justice UK director Robert Palmer said Ms Reeves was “at risk of backing a future Labour government into a corner with the latest announcement ruling out a corporation tax rise.
“Reeves needs to support sensible and credible ways of generating revenue, like keeping open fair tax rises on company profits, to sort out the mess that Britain is in,” he added.
But the British Chambers of Commerce gave the news a big thumbs-up, with director-general Shevaun Haviland saying: “This commitment will give both UK firms and global companies looking to invest here the confidence to help the economy get back to sustainable growth.”