Rishi Sunak urged to scrap corporation tax to boost British industry post pandemic

Rishi Sunak is facing calls to scrap corporation tax and overhaul “largely toothless” foreign takeover rules in an attempt to boost British industry through Brexit and the pandemic.

The Independent Business Network, which has positioned itself as an alternative lobby group to established players such as the British Chambers of Commerce, also said that the pound should be “maintained at a competitive exchange rate”.

The chancellor’s spending review tomorrow provided a platform for “greater co-ordination and focus” around expanding the UK’s trade with the world, it said.

Business leaders who endorsed Brexit in 2016, including John Longworth, a former director-general of the British Chambers of Commerce, and John Mills, who founded JML, established the IBN to seize on the opportunities they believe could be created by leaving the European Union.

It called corporation tax a “disproportionate administrative burden” for companies, and added: “Without corporation tax, businesses will have more cash on their balance sheets, which can be deployed more effectively through greater investment in improving productivity, higher wages, lower consumer prices and higher dividends.”

Its recommendations also include ensuring that sterling remains a “competitive currency”; a move that it said would “help address the productivity crisis, while delivering a resurgent manufacturing base by allowing British industries to compete on the international stage”.

The Brexit vote caused the pound to fall from $1.49 against the dollar. It recovered to $1.43 in the spring of 2018, but now stands at almost $1.33.

The IBN said scrutiny of foreign takeovers was insufficient and it is proposing an “economic health test” to consider the long-term economic benefits of such deals.

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