Fraser Nelson

The radical plans the Tories are keeping under wraps

The radical plans the Tories are keeping under wraps
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So what is George Osborne really up to? If Coffee Housers are feeling depressed at the paucity of ambition in his speech (his ‘cuts’ package  would shave just 1% off government spending) then take heart. In the magazine today, James Forsyth lists the far-more-radical changes that are being discussed by the Cameroons – but kept under wraps. The full piece is here, and the main points are…

 

1)   Corporation tax cuts. No mention was made of a growth agenda in the speech, but there are plans to cut Britain’s company tax rates quite aggressively with Ireland’s 12.5% as a lodestar. Osborne wants Britain to have the lowest corporation tax rates of any major country, so we can imagine that his current proposals to reduce it are a starting point.

2)   Bank windfall tax.  They’d have a new rule saying that banks are not allowed to write off their cumulative losses against tax. The losses are so vast they could, in theory, allow banks to make tax-free profits for years. This would the equivalent to a windfall tax.

3)   VAT at 20% Right now it’s at 15% - the minimum allowed by the European Commission (whose tax it is – a fact Cameron sometimes forgets when he talks about changing the way it’s applied to small companies). Jacking it up to 20% will be noticeable.

4)   Cutting capital expenditure programmes and saying that if anyone wants to build a road they can do it for-profit and as a toll company/

5)   The mix of cuts and spending the ratio being discussed by Tory-leaning economists is 30:70 ratio of cuts.

 

Anyway, do read the whole thing here

CityAM splashed on James’ column (below). Expect more follow-ups from Fleet St in due course.