Exclusive

Sunak defends Budget tax measures, telling LBC UK will be 'internationally competitive'

4 March 2021, 09:33 | Updated: 4 March 2021, 12:48

Ewan Quayle

By Ewan Quayle

The UK "will continue to be an internationally competitive country" despite the biggest tax hike in decades, Rishi Sunak has told LBC.

The Chancellor defended his plans to raise taxes to the highest level in more than 50 years, including a 6% rise in corporation tax in 2023.

He claimed that investment would continue to pour into the country despite new measures to pay for the tens of billions spent during the Covid-19 pandemic.

"Even after the increase in corporation tax which remember is not going to happen for a couple of years from now, so after we've got through this and start recovering," Mr Sunak said.

Explained: Key points from Budget 2021

Read more: Furious 'excluded' caller hits out at Chancellor Rishi Sunak after Budget

"We will still have a lower corporation tax rate than all of our large G7 economies.

"The actual OECD numbers that compare countries on a comparable basis show that we would have the lowest effective corporation tax rate out of the G7, the fifth-lowest in the G20 and with the super deduction we shoot from up from 30th to first over the next two years in terms of this being an attractive place to invest.

"I feel very confident that this will continue to be an internationally competitive country with initiatives like free ports, for example, our investment in R&D and innovation."

Rishi Sunak has defended the biggest tax hikes in 50 years
Rishi Sunak has defended the biggest tax hikes in 50 years. Picture: PA Images

The tax rate on profits made by businesses will increase from 19% to 25%, but will not be implemented until 2023.

He said he was confident that companies would continue to invest despite the increase, with food delivery firm Deliveroo announcing on Thursday morning that it would base its stock exchange venture in London.

"We are a fantastic economy," Mr Sunak said, "you're seeing that today what a bit of confidence from Deliveroo".

Read more: Excluded UK co-founder says budget is "only a teeny tiny concession" to self-employed

"That's a great British success story in FinTech, we reformed high skilled migration visas yesterday to make sure we support our growing life sciences and technology companies.

"You know when I'm here up in Teesside, there are lots of companies are excited about the prospects for growth here and I think hopefully over the coming weeks or months we will hear announcements about that.

"Whether it's in offshore wind or carbon capture and storage new industries, new jobs being created because of the policies that we are putting in place."

The Chancellor was challenged by LBC's Nick Ferrari on the 'excluded' - around three million self-employed people who are ineligible for support during the pandemic.

He announced yesterday that around 600,000 of the group would now be included but the Government has come under fire from campaigners.

Asked why he continued to leave out almost 2.5 million, Mr Sunak said: "I'm glad that we could make an improvement to the system and last year I was frustrated because those who were newly self-employed weren't able to get the grants because we didn't have all their returns.

Read more: EU says UK Irish Sea border grace period extension breaches post-Brexit obligations

"Now that the tax deadline has passed, we're able to bring in over 600,000 more people into the system."

"If you look at it," he added, "this is just one of many things we've done to support people but if you look at it in the round, take a step back, the numbers yesterday show we will have spent over £30 billion over this crisis supporting those in self-employment."