Business secretary Sajid Javid has backed the Chancellor’s plans for a cut in the corporation tax rate, and called for reductions in the personal tax rate, in order to avert a potential downturn following the Brexit decision in the EU referendum vote.
Javid said there should be a £1,000 increase in the personal allowance, and indicated his support for proposals to double tax credits for research and development, increase the annual investment allowance and exclude new plant and machinery from business rates in an interview with the Financial Times.
In addition, Javid said the UK government should take advantage of low interest rates to borrow to create a ‘growing Britain’ fund of up to £100bn. There should be a moratorium on new business regulation.
He also wants all EU migrant workers who were here on the day of the vote to be given the right to remain, while the government should guarantee all medium-term EU economic grants awarded to British firms and regions up until 2020.
George Osborne has already indicated that the Brexit vote will mean he has to abandon a commitment to returning a budget surplus by 2020, while Javid stated that the budget deficit could rise from 3% of GDP to as much as 5%, as a result of the economic downturn and new fiscal stimulus.