Rishi Sunak discusses the Spring Budget
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Ben Habib said the approach was tantamount to poisoning a patient who was already close to death – insisting the Chancellor needed to cut taxes rather than increasing them. During his spring budget speech on March 3, Mr Sunak is widely expected to announce increases to corporation tax from 19 percent, as well as outlining a pathway whereby it will rise to 23 percent.
One penny in the pound is set to be added to the bill for business from this autumn, at a cost to business of £3billion, with further rises in subsequent years.
Property developer Mr Habib told Express.co.uk: “This is barmy. “Increasing corporation tax – a tax on profits – will be like seeking to get a blood out of a stone.
“The private sector has just suffered the biggest demand shock in its history with large swathes having been forcibly closed for the last 12 months.
“No amount of tax increases, of any kind, will assist the Exchequer in balancing the books.”
The furlough scheme, which Mr Sunak is believed to be ready to extend beyond its current April 30 deadline – something Mr Habib has already branded a “mistake”.
Other support measures had also sent government debt soaring but tax hikes were not the answer, Mr Habib said.
He explained: “Tax increases would not raise anywhere near enough to even begin to tackle the debt burden and deficit.
“They would also stifle the economy. The economy has been put into ICU over the last year.
“Tax increases would be akin to injecting poison into the patient while it is already close to death.”
Instead, the only way out of what he called “this economic catastrophe” was via growth, Mr Habib stressed.
He added: “The Chancellor needs to be cutting taxes which hinder spending and growth, not increasing them.
“Only once it has been stabilised and then grown would the private sector be able to tolerate tax increases.
“Taxes which should be slashed are: VAT, Business Rates, National Insurance, Stamp Duty; Tax on Fuel, Tax on Alcohol etc. By cutting these taxes the Chancellor would stimulate spending and business activity.
“To get out of the economic hole created by the lockdowns, the Chancellor must cut taxes, not increase them.
“To do the latter would be economically illiterate.”
Unlike the 2010 Conservative-led government, which pursued spending cuts to rebalance the economy after the global financial crisis, Mr Sunak – widely seen as a possible successor to Prime Minister Boris Johnson – is expected to defer most of the toughest decisions about how to pay for that support in his budget speech.
Britain’s economy had its biggest slump in 300 years in 2020, when it contracted by 10 percent, and will shrink by four in the first three months of 2021, the Bank of England has predicted.
Speaking to Express.co.uk earlier this month, Bob Lyddon, the founder of Lyddon Consulting Services, said Mr Sunak would never be forgiven if he clobbers the English taxpayers who put the Conservatives Party back in Government in 2019.
He explained: “Rishi Sunak needs to wake up.
“Because if he makes Middle England pay everything he’s never going to be headmaster is he?
“He’s very ambitious and he wants to be Prime Minister. But if he stiffs people who are actually members of the Conservative Party, who will make him head of the Conservative Party, he is history.”
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