UK government has revealed, business investment in the United Kingdom decreased to the lowest rate in the G7 group of wealthy countries despite corporation tax cuts, as ministers of the United Kingdom prepare 30 billion pounds of giveaways targeted at companies and high-earning workers.
The Institute for Public Policy Research (IPPR) said the headline tax rate on companies’ profits had failed to boost investment and economic growth in the United Kingdom over the past decade.
Liz Truss, the prime minister of the United Kingdom, argues that lower rates of corporation tax can unleash an investment boom in the country to help boost economic growth towards a target rate of 2.5 percent per year.
However, IPPR said that decreasing rate from 30 percent in 2007 to 19 percent in 2019 did not spur high private investment and faster economic growth. Despite repeated tax cuts to the lowest rate, the United Kingdom fell behind Canada and Italy to rank with the lowest private industry investment in the G7 as a share of the UK’s income.
According to studies, corporation tax cuts used by successive conservative governments have had little bearing on economic growth and business investment.