Jeremy Hunt has been told to cut taxes to restore confidence in the UK economy ahead of the Autumn Statement.
Small business owners have called on the Chancellor to ease the financial burden on households and small businesses to boost Britain’s sluggish economic growth.
It comes after Bank of England Governor Andrew Bailey said on Thursday (November 2) Britain’s GDP growth will remain below its historic average until 2026 and remain broadly flat through 2024.
Pressure is mounting upon Mr Hunt to do even more to revive the economy, with some in the Conservative Party having called for tax cuts while others caution against such a move out of concern over how this will impact inflation.
The Chancellor has said his Autumn Statement on November 22 will set out how the Government plans to boost economic growth by “unlocking private investment, getting more Brits back to work, and delivering a more productive British state”.
Asked how Mr Hunt can increase confidence in the economy, Leicester based lawyer Steven Mather, Director of Steven Mather Solicitor, said: “Reduce tax.”
He added: “Particularly, reduce corporation tax to encourage people to innovate and start their own businesses. Hunt needs to reverse the corporation tax increase imposed, or at the very least change the profit level at which it should be paid.
“Gordon Brown introduced the 10 percent tax rate, later reduced to zero percent and then increased significantly. Hunt needs to do something dramatic like this, as there are a lot of other places in the world where innovators can establish a business and pay less tax.”
Samuel Mather-Holgate, an independent financial advisor at Mather and Murray Financial, said: “To say Liz Truzz was right might be a stretch, but Jeremy Hunt has done equal damage to the economy by stifling growth by hiking up business and personal taxes.
“The status quo cannot continue as not only will we not have a dynamic, thriving economy if we don’t cut taxes, but we will have a cumbersome, flat line economy with no improvement in productivity and an increasing debt yield with less to spend on public services. This self-inflicted mess won’t be sorted out by an unimaginative Chancellor, it needs a General Election.”
However, Philip Dragoumis, Director of Thera Wealth Management, said there should be no tax cuts in the Autumn Statement.
He added: “Government borrowing costs have shot up with higher interest rates and the number one priority should be getting inflation down to two percent.
“This will help rates go down, instil confidence and pave the way for an eventual recovery. If [the Government] can do this by this time next year, their electoral chances may well have improved.”
Alastair Hoyne, CEO at Finanze, said the UK has lost the essence of robust fiscal planning and replaced it with fiscal fire-fighting.
He added: “There needs to be a comprehensive approach to restore confidence and pave the way for a resilient economic rebound. We must implement measures to reduce our exposure to the influence and risks of global events.”
Mr Hoyne called on the Chancellor to focus on job creation, training and adapting to evolving industries to ensure Britain’s long-term economic stability.
But he warned: “Achieving this against a backdrop of an increased burden on public services, spiralling domestic debt and a decreased Treasury purse is going to take tough choices.”
Property developer Kundan Bhaduri of The Kushman Group, said Mr Hunt faces a significant challenge in reassuring investors and the public about the strength of his economic policies.
He added: “Marred by a surge in business bankruptcies, and a slump in GDP growth, the forecasts don’t look pretty. With global inflation and high national debt levels, the task of reinvigorating the economy is not straightforward.”
Mr Bhaduri welcomed the Chancellor’s previous statements on childcare support and welfare changes as they address “key issues” in workforce participation.
The portfolio landlord continued: “Separately, a commitment to full expensing of capital expenditure for three years will surely help stimulate growth.”
A Government spokesperson said: “The UK has the lowest corporation tax in the G7, the joint most generous capital allowance regime of any major advanced economy and a simplified tax system to save firms time and money.
“Growing the economy is one of our top priorities, which is why we’ve introduced full expensing, an effective £27billion corporation tax cut which results in a 25p tax saving for every pound invested, as well as a new £500m per year R&D scheme system for 20,000 UK SMEs.”
