 are also in the firing line – now least from Sunak's impending rise in corporation tax from 19pc to 25pc. SMEs drive the British economy, creating over half of our GDP and two-thirds of employment. Having been hammered during lockdown, taking 6pc off the stretched profit margins of countless such firms will finish many of them off. Few policies are more likely to discourage growth. Far from raising revenue, this corporation tax hike could cost the Government money. The upcoming Autumn Statement is being presented as a corrective to the mini-Budget proposed by then prime minister Liz Truss and former chancellor Kwasi Kwarteng in September. On leaving office, Truss insisted 'the UK has been held back for too long by low economic growth'. She was right. 'We simply cannot afford to be a low-growth country where the government takes up an increasing share of our national wealth,' Truss continued. Right again. The mini-Budget wasn't 'extreme', 'libertarian' or 'grossly irresponsible', as many now claim. Proposals to freeze corporation tax, lower national insurance contributions and shave a penny off income tax next year were, in themselves, entirely reasonable. Even cutting the top rate from 45pc to 40pc, while politically ill-timed, was far from radical. That same tax rate was 40pc throughout Tony Blair's decade in Number 10. The mistake Truss and Kwarteng made was to do too much, too soon, without warning what was coming. With financial markets concerned about the cost of the Government's energy price cap, and the Bank of England selling debt, that was enough to cause a panic. But it was the woeful packaging and timing that roiled the gilts market,){kind=link}
A stealth tax raid is the wrong strategy at the wrong time – and could backfire badly
Rishi Sunak is the youngest Prime Minister of modern times, aged just 42. As our fresh-faced premier takes charge, the UK faces what he acknowledges are “profound economic challenges”.
Born in 1980, Rishi Sunak doesn’t remember the 1970s. Yet he leads a country plagued by high inflation, spiralling debts and industrial strife – as during that most political tumultuous of decades.
Wages lag price rises, sapping economy-wide spending power and broader confidence. Britain needs to break out of this post-Covid impasse – and fast.
So why are government insiders warning of a “painful” stealth tax raid? This is the wrong strategy at the wrong time – and could backfire badly.