Liz Truss to call for corporation tax to be lowered back to 19% in rally speech

The former prime minister is sticking to her pro-tax cut agenda, despite being ousted from No 10 after only 49 days last year.

Patrick Daly
Saturday 30 September 2023 22:30 BST
Liz Truss will tell a fringe rally at the Tory conference that taxes on businesses should not be normalised (Stefan Rousseau/PA)
Liz Truss will tell a fringe rally at the Tory conference that taxes on businesses should not be normalised (Stefan Rousseau/PA)

Former prime minister Liz Truss will urge the Conservative leadership to position itself as the “party of business again” by slashing corporation tax.

Ms Truss will argue in a speech on the fringes of the Tory Party conference that high taxes on businesses must not be “normalised”, suggesting the private sector is “drowning in red tape”.

The former Tory leader will say that the best way to get the UK economy growing is to “free” the private sector.

She is expected to use her appearance at a so-called growth rally in Manchester to call for corporation tax to be lowered back to 19%, taking it down from its current 25% rate.

In recent months, the former Tory leader has being defending her record during her 49-day stint in Downing Street before the fallout from her mini-budget saw her ousted in October 2022.

Her economic Growth Plan, delivered 12 months ago by then-chancellor Kwasi Kwarteng, sent the value of the pound tumbling and mortgage rates soaring due to the market’s adverse reaction to its £45 billion of unfunded tax cuts.

We must not normalise the raiding of businesses’ coffers

Former prime minister Liz Truss

During her leadership campaign last year, Ms Truss pledged to scrap the planned increase of corporation tax from 19% to 25%.

After becoming prime minister, she included the policy in the mini-budget.

She later reversed the move, however, after saying officials briefed her about a potential “market meltdown”.

Her successor, Prime Minister Rishi Sunak, allowed the rise to go ahead in April as he looked to steady the economy.

In pre-briefed comments, Ms Truss is expected to say on Monday: “We must unleash British business by cutting corporation tax.

“We can’t stand idly by while companies like AstraZeneca move operations abroad because of our huge tax burden or small businesses shut up shop because they are drowning in red tape.

“We should be hungry to attract the world’s best businesses and encouraging people to start businesses here at home. We must not normalise the raiding of businesses’ coffers.

“Ahead of this year’s autumn statement, we must make the Conservative Party the party of business once again, by getting corporation tax back down to 19%.

“This is how we make Britain grow again. It is free businesses that will get us there, not the Treasury, not the Government and not the state.

“Only free businesses can get Britain out of its 25-year economic stagnation. Only free businesses can create the economic growth and tax revenues on which our public services rely.

“So let’s give British business more freedom by easing their tax burden – freedom to flourish, to employ, to export, to research, develop and invest in the future, and to make Britain grow again.”

She is expected to be joined at the rally by former business secretary Sir Jacob Rees-Mogg and former home secretary Dame Priti Patel.

Dame Priti this week called the current tax burden “unsustainable” and said it should come down.

It comes after experts said the Tories will have presided over, during the time between the 2019 election and the next general election, the biggest set of tax rises since at least the Second World War.

Analysis by the Institute for Fiscal Studies (IFS) think tank said taxes will have risen to around 37% of national income, equivalent to around £3,500 more per household, even if it will not be shared equally.

In reply to Ms Truss’ comments, No 10 pointed to remarks made by Chancellor Jeremy Hunt to The Times on Saturday in which he said welfare reforms and the integration of artificial intelligence into the public sector could be the way to end the “vicious circle of ever-rising taxes”.

He has ruled out tax cuts in the autumn statement in November, but could potentially use the spring budget to announce tax reductions ahead of an election.

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