LONDON, March 6 (Reuters) - Britain's opposition Labour
Party, ahead in opinion polls, said on Monday it will launch a
review into business taxes with the aim of creating a stable
environment for investments, a chronic weak spot in the economy.
Opinion polls currently put the Labour Party, led by Keir
Starmer, around 20 points ahead of Prime Minister Rishi Sunak's
Conservatives, with the next national election expected in 2024.
Labour criticised the Conservative government's "chaotic"
approach to business taxation, marked by several changes to
corporate tax rates and incentives in recent years that the
party says has deterred investors who seek stability.
British business investment has stalled since the 2016
Brexit vote, lagging behind peers France, Germany and the United
States over the same time frame, according to data from the
Organisation for Economic Co-operation and Development.
Labour said its finance spokesperson Rachel Reeves will
deliver a speech on Tuesday to manufacturing association Make UK
that will outline its plans for the review of business taxes.
The party said it rejected calls to cut corporation tax,
adding that Britain should move in lockstep with the rest of
Group of Seven economies while offering targeted allowances to
boost investment.
Labour's focus on investment comes ahead of the Conservative
government's annual budget on March 15, to be presented by
finance minister Jeremy Hunt.
A previously announced increase in the headline rate of
corporation tax, from 19% to 25%, is due to come into force in
April. Hunt has said he wants to cut business taxes, but only
once the public finances allow it.
"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," Reeves said in an
extract of her speech.
"So it's no wonder businesses are unable to plan and our
investment rates are cratering."
Labour said its review would look at how the tax system can
incentivise businesses to direct profits into investment, rather
than a short-termist focus on share buy-backs and dividends.
It said its tax plans would comprise a long-term framework
to give businesses certainty over government policy over a
period of years.
In a move that drew comparisons with the Labour government
of the 1960s, Sunak last month launched a ministry for science,
innovation and technology, part of his ambition to create the
world's "next Silicon Valley" in Britain.
(Reporting by Andy Bruce; Editing by Shounak Dasgupta)
Messaging: @brucereuters))
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