Tories 'hitting firms hard' with 'yo-yo' tax rates that keep going up and down

06 March 2023 , 22:30

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Rachel Reeves will pledge to bring 'yo-yo' taxes to an end (Image: PA)

Rachel Reeves will pledge to end the “yo-yo” of tax rates which Labour says is putting businesses off the UK.

The Shadow Chancellor will say on Tuesday that Labour will stop the “11th hour approach that hampers investment and growth”.

Corporation tax is due to rise from 19% to 25% next month, but some Tory MPs have been urging Chancellor Jeremy Hunt to scrap this at the last minute in next week’s Budget.

Speaking at a conference of manufacturers, Ms Reeves will announce Labour will carry out a review on the business tax regime to provide certainty for firms.

“Central to strong investment are stability and certainty in place of chaos and an 11th hour approach that hampers investment and growth,” she will say.

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Ms Reeves said it is putting businesses off investing in the UK (PA)

“Nowhere is that clearer than in our tax system. In recent years, corporation tax has gone up and down like a yo-yo while the government has papered over the cracks with short-term fixes like the super-deduction.

"So it’s no wonder businesses are unable to plan and our investment rates are cratering.”

Speaking at MakeUK's annual conference in London she will say that Tory policy has created "huge uncertainty in which to plan investment".

She is expected to say: “If the government brings forward a genuine boost to investment and if it is affordable, we will back it to help get our economy growing again.

“But stop-go tax policy is only a sticking plaster. What businesses need are certainty, consistency and incentives for investment. Labour will provide that.”

Dave Burke