Labour and corporate welfare….

Labour launches inquiry into the use of corporate tax reliefs

Labour have recently launched an inquiry into corporate tax reliefs. Seema Malhotra, the shadow chief secretary to the Treasury, gave a speech this morning to the Social Market Foundation saying the Treasury was “not fit for purpose”. She based her claim on reports from the Commons public accounts committee in March saying the Treasury gives business tax reliefs worth around £100bn but does not monitor them properly.
Malhotra said George Osborne, the chancellor, was “remarkably uninterested in what [business tax reliefs] cost and whether they work”.

It is important to point to these tax breaks – but Labour also needs to include within their investigations an examination of how tax benefits (including capital allowances) combine with headline rates to give UK businesses a better deal than their counterparts elsewhere. Malhotra is right to state that:

The chancellor hasn’t the faintest idea whether the array of tax reliefs for business meet their goals and whether they are value for money for the taxpayer. George Osborne is not interested in evidence that conflicts with his own political prejudices.

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