Sunak’s corporation tax plan criticised by Patrick Minford

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Jacob Rees-Mogg used his GB News show to make a bold prediction ahead of tomorrow’s budget, telling viewers he believes the Chancellor will delay the expected rise in Corporation Tax. He used the same monologue to rail against the new proposal for a global minimum Corporation Tax rate, asking why Brits voted to leave only to surrender new powers to the OECD.

Speaking during his “Moggologue”, the former Business Secretary predicted: “I have a feeling, as we move on to the budget tomorrow, that we may see some good news on tax.

“You see, competition on tax policy is fundamental and we need an economy that grows.

“Jeremy Hunt is a fundamentally intelligent man, I’ve always had a high opinion of him, he knows what he’s doing.

“I have a sneaking suspicion that he is at least going to delay the corporation tax raise because of the effect it will have on the economy if he goes ahead with it.”

Mr Rees-Mogg made the prediction after lambasting a new treaty signed up to by the UK, which hands over significant decision-making powers on domestic tax policy.

In 2021 the UK government signed up to an agreement with the OECD – the Organisation for Economic Co-operation and Development – that would limit global corporation tax to a minimum of 15 percent.

Jacob Rees-Mogg, a stalwart Brexiteer, argued there’s little difference in handing over major powers to the Brussels-based EU and the Paris-based OECD.

“Brexit was about regaining sovereignty over the United Kingdom of Great Britain and Northern Ireland, but we’ve made this funny deal that is once again putting us back under foreign control.

“It’s an agreement that tax – corporation tax specifically – should be subject to a global minimum of 15 percent.

“But surely what we did was to vote against international bodies telling us what to do – whether it’s the ECHR or the EU or the OECD.”

Mr Rees-Mogg called the OECD an “obscure Paris-based organisation that now wants to give us rules whereas we used to get them from Brussels”.

He also lavished praise on Chancellor Jeremy Hunt ahead of tomorrow’s budget, describing him as a “fundamentally intelligent man, I’ve always had a high opinion of him, he knows what he’s doing.”

“He isn’t some fly-by-night politician, he’s someone who understands economics, ran a successful business.”

Boris and Liz Truss ally Jacob Rees-Mogg did, however, point out that while Mr Hunt is seemingly happy to sign Britain up to the new OECD minimum corporation tax, just a few months ago he ran for the Tory leadership on a pledge to cut the country’s corporation tax to 12.5 percent.

“Bear in mind Jeremy Hunt the Chancellor not that long ago was in favour of cutting corporation tax down to 12.5 percent So why should we now agree to something that risks our future economic competitiveness?”

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He cited Ireland as an example of a country whose economy had benefited from very low rates of corporation tax, pointing out that countless international companies had set up headquarters there to pay less tax.

At the moment UK corporation tax is set to rise from 19 percent to 25 percent, double the rate paid by large firms in the Republic of Ireland.

Last Summer, Liz Truss slammed Rishi Sunak’s plans to hike the tax, arguing the move would put off investment.

There has been no indication in the run-up to the Budget that Mr Hunt plans to pause or scrap the planned increase.

On Sunday Rishi Sunak told journalists that despite the increase, the UK will still have the lowest level of corporation tax in the G7, and insisted we would continue to attract foreign businesses to set up shop here.

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