Rachel Reeves – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Rachel Reeves on 2016-07-06.

To ask Mr Chancellor of the Exchequer, what assessment his Department has made of the potential effect of a reduction in corporation tax to (a) 15 (b) 14 and (c) 10 per cent on (i) GDP, (ii) unemployment and (iii) investment in (A) 2016, (B) 2017, (C) 2017, (D) 2018, (E) 2019 and (F) 2010.

Mr David Gauke

The corporation tax reductions since 2010 have been designed to increase the competitiveness of the UK business tax system and to support investment and jobs in the UK. Their positive effect has been evidenced by strong growth in GDP, employment, and business investment since 2010.

The Chancellor has now set out his ambition to reduce the corporation tax rate further, to 15 percent or below, to reinforce this strategy and send a clear message that the UK is open for business.

Updated government economic modelling set out in the Business Tax Road Map suggests that corporation tax cuts delivered since 2010 could increase long-run GDP by over 1 percent. Details of this model can be found here:

https://www.gov.uk/government/publications/analysis-of-the-dynamic-effects-of-corporation-tax-reductions