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George Osborne draws up a five year roadmap for British business as Right warns him against tax rises

Two days ahead of the Pre-Budget Report, today's ConHome is very tax-focused.

On CentreRight, Matt Sinclair of The TaxPayers' Alliance warns that higher VAT will undermine the Tory claim to be a pro-poor party. VAT, Sinclair writes, "costs the poorest twice as much - as a portion of their income." The TPA wants a combination of deep spending cuts, public sector reform and pro-growth policies to cut the deficit.

Essential to growing the economy is lower corporation tax, writes Lord Forsyth on Platform. Forsyth, who was chosen by George Osborne to write a landmark report for him on tax in 2005, says that lower corporation tax - he recommends 20p in the pound - and the repeal of the 50p tax band are essential to get the British economy going again.  Britain, he says, is ranked 83rd in the world taxation league table after the Brown-Blair decade of more than one hundred tax increases.

73% of Tory members fear that George Osborne will have to impose larger-than-necessary tax increases because he has only outlined very modest spending reductions so far. The Shadow Chancellor is not being helped by the tendency of his frontbenchers to rush to spend any savings they identify. Last week I suggested he impose a requirement that two-thirds of departmental savings identified by 'spending spokesmen' be earmarked for deficit reduction.

OSBORNE GEORGE PORTRAIT In an interview with the Financial Times George Osborne gives no indication that he is yet ready to bite the bullet on much deeper spending cuts but his pro-business attitude is encouraging. He says he wants Britain to have “the most attractive and competitive corporate tax regime of any major economy in five years’ time”. He is already pledged to fund a 25p corporation tax rate by a process of simplification and Tory Treasurer Michael Spencer last week appeared to reveal Tory hopes to get the rate down to 20p by the end of a parliament.

Mr Osborne tells the FT that he and David Cameron have been talking to global entrepreneurs about how to attract business to the UK and are considering a range of measures that include a much friendlier regime for intellectual property and multinationals.

Aware of the damage done to him by the suggestion that he is a "40% Shadow Chancellor" (because he also serves as General Election Co-ordinator) he tells the FT that Philip Hammond, his powerful Deputy, is undertaking more of the "attack dog" role against Labour's economic record.

Tim Montgomerie


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