Tax reform, productivity, trade, public services: the spring statement had no answer on issues plaguing the UK economy
The chancellor widely briefed that this statement would not move the earth. And it delivered: it was not a “fiscal event” – but it should have been. Urgent action is required in three areas: clamping down on corporation tax avoidance; addressing the crisis in public services; and long-term reforms to make the economy fairer and more sustainable.
In the week when it was revealed that tax paid by multinationals has been in consistent decline, the case for reforms to corporation tax are overwhelming and urgent. Our proposal at the Institute for Public Policy Research for an “alternative minimum corporation tax” for multinational companies – based on UK revenues and global profitability, and triggered by five years of low reported profits – would tackle avoidance and ensure a level playing field with the vast majority of responsible businesses that pay the taxes they owe. But cancelling the further planned cut to corporation tax was the very least the chancellor could have done.