Yesterday, in the House of Commons, George Osborne provided an upbeat statement of Britain’s economic prospects following the publication of the latest Office for Budget Responsibility (“OBR”) report. The main findings of the report are
(1) GDP growth for this year revised up from 1.2% to 1.8%
(2) Sustainable growth averaging more than 2% over the next 5 years
(3) public sector job cuts over the next 4 years are revised downwards from 490,000 to 330,000.
(4) Borrowing this year expected to be £1bn less than predicted in June
(5) There will not be a “double dip” recession.
Amongst Mr. Osborne’s most interesting announcements was the proposal to reduce Corporation Tax to 10% UK wide on profits from newly commercialised patents to encourage hi-tech business. I fully expect this Government to introduce further reductions in Corporation tax across the UK in the future.
Already, the Government is hoping that a 10% Corporation tax can be introduced in relation to the income of all Companies based in Northern Ireland. The synergy between these two proposals should not be ignored by the Executive. Northern Ireland will not see any benefit if it waits for the rest of the UK to bring down the tax. They must take advantage of this proposal and press for its implementation immediately.
There is an interesting aside to this story. In reply to questions, following his statement, George Osborne indicated that he supports other countries who set their own taxes in the way they see fit. That was a reference to possible pressure being put on Ireland to “harmonise” with the rest of Europe. That sets the UK on a collision course with the Germans and the French.