Budget's billion pound tax giveaways make mockery of 'we are all in this together' claim, says UCU

22 June 2010 | last updated: 11 December 2015

UCU today said the news that Corporation Tax is to be slashed from 28% to 24% made a mockery of the coalition government's claims that 'we are all in this together'.

The union said the billion pounds giveaway to big business could have been used to abolish university fees.

In his Budget speech, Chancellor George Osborne said that the public sector was not to blame for the financial crisis, but had to help deal with the crisis and announced a two-year pay freeze. He then announced that Corporation Tax would drop to 24%, depriving the Treasury of £8bn over the next four years.

If George Osborne carries out his plan to make the UK the G20 country with lowest level of corporation tax the Treasury would lose £6.4bn a year. The UK currently has a corporation tax lower than all the G7 countries apart from Italy. Earlier this year, UCU recommended raising corporation tax to just the level of the G7 average to raise the funds to be able to abolish university fees.

The union's proposals would still leave the UK's corporation tax below that of France, Japan and the United States and 96% of companies in the UK would be unaffected by the change. UCU said its proposals were in response to the landmark Dearing report, which called for students, business and the state to share the cost of higher education.

UCU general secretary, Sally Hunt, said: 'Starving education of funds and making families pay more to access a university education, while authorising billions in tax giveaways to big business would be a disaster for the UK. Today's Corporation Tax cut could have funded university places for all students forced to cough up for university fees.

'We do not believe the UK's future is as a haven for companies who want to move capital and have no loyalty. The coalition government's proposals to lower corporation tax and deprive the Treasury of over £6bn prove once again that the talk of us all being in this together is merely an offensive soundbite.'

For more on the union's plans for the business education tax visit:Scrap fees and fund university through business tax, says new report 

Corporation tax rates, G7 2009

 

Combined corporate income tax rate (%)

Japan

39.54

United States

39.1

France

34.43

Canada

31.32

Germany

30.18

United Kingdom

28.00

Italy

27.5

G7 average

32.87

SOURCE: OECD

notes

  • £6.4bn figure comes from UK corporation tax dropping down from 28% to 20% (same as Turkey) at an average loss of £800m per %. Guardian
  • *At the CBI dinner on 19 May 2010 George Osborne said: "Our aim is to create the most competitive corporate tax regime in the G20." 

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