Chi Onwurah – 2015 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Chi Onwurah on 2015-12-08.

To ask Mr Chancellor of the Exchequer, if he will make an assessment on the financial effect on the UK manufacturing sector of reductions to (a) capital allowances and (b) corporation tax since 2010.

Mr David Gauke

The Government recognises the importance of the manufacturing sector in the UK economy.

In order to support investment across the economy, including in the manufacturing sector, since 2010, the Government has reduced the corporation tax rate from 28% to 20%, and it is due to fall to 18% in 2020. Overall the corporation tax cuts delivered since 2010 will save businesses £10 billion a year from 2016. Further cuts in the corporation tax rate in this Parliament, to 19% in 2017 and 18% in 2020, will save small and large businesses a further £6.6 billion by 2021, and will benefit 1.1 million businesses. The manufacturing sector, alongside other sectors of the economy, have benefited from the corporation tax rate changes.

At Summer Budget 2015, the government announced that it would increase the permanent level of the Annual Investment Allowance to £200,000, its highest ever permanent level. The sectors with most companies benefitting include manufacturing as well as wholesale and retail, and agriculture.