Member Article

Chamber says PM had to 'calm markets' after reversing decision on corporation tax

Business leaders in Coventry and Warwickshire said the Prime Minister’s decision to take action to calm markets was a welcome step.

Prime Minister Liz Truss said the Government would go ahead with the planned corporation tax rise from 19 to 25 per cent which was previously reversed in Chancellor Kwasi Kwarteng’s mini budget. At the same time, Kwarteng has also been replaced as Chancellor by Jeremy Hunt MP.

Corin Crane, Chief Executive of the Coventry and Warwickshire Chamber of Commerce, said: “It’s been a volatile few weeks since the mini budget and it was clear that more action was going to be needed from the Government.

“While companies will always want lower taxes across the board, it was the upfront costs of doing business that were the real concern, such as energy bills and National Insurance. Corporation tax being reduced was a much lower priority and, as business leaders, we can understand the decision to maintain the planned increase in a bid to help calm the markets.

“Whether it has the desired effect will become clear in the coming days but for long term stability, the Government – including the new Chancellor – will need to set out a long term plan for the economy to give confidence to everyone, from businesses in Coventry and Warwickshire through to investors across the globe.”

Shevaun Haviland, Director General of the BCC, said: “The Prime Minister was right to take some action now. We have been calling for the Government to urgently address market volatility, return stability to the economy and give business some certainty to plan. “Firms will always prefer a lighter tax burden, but they are most concerned about upfront costs, such as National Insurance Contributions and energy bills.

“These are the issues that are keeping them up at night, alongside rising inflation and interest rates.

“The BCC fully supports a strategy for growth, that lets businesses thrive and support their communities but returning stability to the economy must be the immediate priority. “To do this the Government must quickly set out a longer-term plan to prove it is serious about helping businesses through the difficult months ahead. Time is of the essence.”

This was posted in Bdaily's Members' News section by Matt Joyce .