Osborne’s corporation tax ‘hypocrisy’

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by a Newsnet reporter

In a speech yesterday to the Daily Telegraph sponsored ‘Festival of Business’ in Manchester, Chancellor of the Exchequer George Osborne trumpeted the Coalition government’s successive reduction of corporation tax.  Mr Osborne sees reductions in the tax as a key strategy in boosting the private sector and kick-starting the economy.  

In his speech Mr Osborne said:  “We want Britain to have the most competitive business tax system of any of our major competitors.

“So I have already cut corporation tax –from 28% to 26%.  It will come down again next year, and again in 2013 and again in 2014 to reach just 23%. That’s the lowest ever rate in the UK and the lowest in the G7. I have also cut the small companies rate to 20%.”

However the Chancellor was immediately criticised for his “hypocrisy” as the UK Treasury has repeatedly blocked moves to give control of this tax power to Holyrood.  The Scottish government believes that Scottish control of the taxation power is necessary in order to protect and develop the Scottish economy, a position supported by many leading Scottish business figures.  

Speaking in response to the Chancellor’s claims, SNP Westminster Treasury spokesperson Stewart Hosie MP said Mr Osborne had undermined his government’s and his own department’s ongoing resistance to devolving responsibility for corporation tax to the Scottish Parliament.

Mr Hosie said: “George Osborne’s speech is typical of the ‘do as I say, not as I do’attitude which has been shown by the Tories and Lib Dems – this is pure hypocrisy from the Treasury.

“What’s sauce for the goose is also sauce for the gander.  While Scottish Government calls for responsibility for corporation tax to be devolved, so that we can stimulate economic activity and boost jobs, are dismissed, the Chancellor is trumpeting the opposite argument for the Treasury.

“As ever, the UK Government only ever sees things from the perspective of what suits the London Treasury.

“Devolution of Corporation Tax was a key campaign issue for the SNP and the cross-party Scotland Bill Committee in the last Parliament concluded that this power should be available to the Scottish Government if it is granted to Northern Ireland.  The Scottish people have spoken and Westminster must finally wake up to what Scotland wants.

“Control over corporation tax would enable us to boost investment, bringing jobs to communities across Scotland, grow the economy and take the right decisions for Scotland.

“There has also been backing from business leaders, with a growing number of Scotland’s most successful entrepreneurs calling for change, such as Jim McColl and Sir Tom Hunter.  And across the political spectrum there has been support for the principle of devolving responsibility for corporation tax, such as the Steel Commission, as well as the last Scotland Bill Committee.

“George Osborne and his colleagues should reflect on the fact that, while they ignore the will of the Scottish people, the SNP’s poll ratings are reaching record highs and independence has overtaken the status quo as the favoured option for people.”