Louise Haigh – 2015 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Louise Haigh on 2015-10-09.

To ask Mr Chancellor of the Exchequer, what recent assessment he has made of the effect of the reduction in the rate of corporation tax on public sector net borrowing and debt.

Mr David Gauke

The direct fiscal impact of the policy was set out in Table 2.1 of the Budget document, accessible via the following link:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/443232/50325_Summer_Budget_15_Web_Accessible.pdf

This figure does not take into account the dynamic economic impacts of the policy. In 2013, the Government published a report modelling the economic impact of the corporation tax cuts announced in the previous parliament. This showed that, through increases to investment and demand for labour, which in turn raise wages and consumption, the cost of corporation tax cuts falls by between 45 per cent and 60 per cent in the long term.