Chancellor misses opportunity to boost economy, says IoD

22 March 2006

Business leaders said they were disappointed that the Chancellor missed an opportunity to reduce corporation tax in today’s Budget. The Institute of Directors (IoD) regretted that the Chancellor chose to adjust a range of reliefs, schemes and exemptions, when a simple cut in the main rate of corporation tax would have been more beneficial.  Britain’s rate of corporation tax is not as competitive as it needs to be.

Whilst welcoming the efficiency savings announced in the Budget, the IoD said it remains concerned that the Chancellor has done nothing significant to reverse the growth in tax and spend seen over recent years.

Miles Templeman, Director General of the IoD, said:

“The competitive advantages the UK once enjoyed with a 30% rate of corporation tax have been eroded away. We need to reduce the rate of corporation tax in order to boost our competitiveness.”

The IoD said it welcomed the extension of free Further Education up to the age of 25. On the commitment to increase expenditure on schools, the crucial issue is that money is spent efficiently. Despite the big increases in expenditure over the last few years, far too many school leavers still fail to get good GCSE results and a fifth of schools lack a permanent head teacher.

The IoD said it welcomed the reduction of 5% in real terms the reduction in expenditure of four key Government departments – HMRC, HM Treasury, DWP and the Cabinet Office.