Budget 2011

[rov1100]

Is lowering the corporation tax by 5% the way to cure the countries ills? A reduction in corporation tax befefits only companies making them stronger as they have less tax to pay out.

Or could there be an alternative? We have just witnessed the successful car scappage scheme where the handout was given to the consumer and not the car maker. The result was that order books were full, profits rose, and many people were kept in full time jobs.

The government did not lose out because the £1000 given to the consumer was reclaimed with the VAT on the car.

Therefore it appears there were no losers. The consumer got a bargain, the car manufacturers (whether foreign or British) upped their sales. Workers kept their jobs.

Obviously you cannot have a car scrappage scheme to run indefinately but should the theory of stimulating demand and a successful economy be achieved by enticing the consumer first?

[R1Geezer]

The idea is that companies will find it more attractive to do business here and hopefully it will lead to more employment. The car scrappage scheme is insignificant in this context.

[rojash]

Looking at they way things have been working over the last few years, a reduction in Corporation tax will just mean an increase in remuneration for executives, while workers will be laid off or made redundant.

"should the theory of stimulating demand and a successful economy be achieved by enticing the consumer first? "

Yes, and one way to entice the consumer would be a package to improve their job security, or reduce their outgoings, instead of increasing the income of the fat cats.

[youngmafbog]

Not true, the Irish did very nicely out of attracting companies due to a low tax rate.

It is a lefty ideal that you tax at 90% and International companies will just pay. Teh reality is the total opposite and indeed comapnies such as wpp have been relocating out of the UK.

[rojash]

Reducing corporation tax may discourage them from moving their registered office out of the UK, but if you want to get the economy moving you need to stimulate spending the high street. If a company remains registered in the UK, but closes some of its facilities or moves them abroad, or even just puts expansion on hold, there is no stimulus to the economy.

It's a righty idea that if you make the rich richer, that will somehow fix all your problems. You've chosen a great example with Ireland - it's as broke as Greece and Italy.

[anotheoldgit]

Little seems to have been said about the £100 he has taken off the old peoples winter fuel allowance.

In fact the coward did even mention it when he gave out his budget speech.