Cut Taxes to Stop Exodus of UK Firms, Says Osborne; George Osborne: His Plans Would 'Restore Competitiveness' Alistair Darling: Caused Confusion
Byline: Michael Lea
THE Tories last night demanded an immediate cut in business taxes to prevent an exodus of firms from Britain.
Shadow Chancellor George Osborne said Labour should match Tory plans to slash the main rate of corporation tax from 28p in the pound to 25p.
He was prompted to write an open letter to Alistair Darling after two more UK companies announced plans to relocate to Ireland, where corporation tax is just 12.5 per cent.
Relocating abroad is a major and expensive operation but one of the firms, investment company Henderson Group, said the ?4.5million cost would be offset by the tax benefits.
In his letter to the Chancellor, Mr Osborne wrote: 'It is further evidence of the damage done to the UK by the confusion you have caused in the last year over the future of our business tax regime.' In 1997, Britain had the fourth lowest rate of corporate tax in the EU but now has the eighth highest.
Mr Osborne wrote: 'With companies leaving Britain, weakening an already ailing British economy, I urge you to adopt our proposals.
'This involves, as an initial step, reducing the main corporation tax rate from 28 per cent to 25 per cent.
'This would go some way towards undoing the damage the Government has done by failing to keep pace with European tax rates.' He also called for the tax system to be simplified and said his plans would 'restore competitiveness'.
Four large British companies in the past five months have announced that they are shifting their operations to Ireland in a dramatic sign of the rising pressure on the Treasury to overhaul the tax regime. …