Boris Johnson addressed business leaders at the CBI annual conference this morning.
Having regaled the audience with tales of a short-lived ambition to set up a kitchen tiles company after he left university, the Prime Minister got onto corporation tax — understandably a major concern for the assembled guests.
He told the crowd that the Conservatives would postpone plans to cut business rates, but sought to “remind” them that:
“The alternative is Jeremy Corbyn — who would whack it straight back up to the highest levels in Europe.”
But Mr Johnson is wrong.
As it stands, corporation tax is currently 19 per cent, and had been slated to drop to 17 per cent, (though Mr Johnson confirmed today that his party will not go ahead with the cut).
Labour say they will raise the main rate of corporation tax to 26 per cent by 2022 — the level it was in 2011.
There are various ways to measure corporate tax rates, but stats from the Organisation for Economic Cooperation and Development (OECD) show that on all standard measures, a 26 per cent rate would not see the UK take top spot as Mr Johnson claims.
Looking at the rate set by central governments, we’d be behind France, Portugal, Belgium, and Greece. The same is true when we look at the combined corporate income tax rate (a measure that includes taxes levelled locally, as happens in some countries outside the UK).
The Conservative Party were contacted for comment.