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George Osborne Teflon Man?

The Chancellor said he is planning a “brick-by-brick” dismantling of the barriers that are holding Britain back.

In the coming months he will push ahead with plans to change employment law, reduce health and safety bureaucracy and improve support for British exporters.

Yesterday, a bullish Mr Osborne claimed Britain was now “on the mend” and he predicted the UK would grow faster over the next two years than Germany, France, Japan and the United States sighting the European Commission report also published yesterday.

Mr Osborne announced that a new 10p rate for corporation tax would be introduced on profits generated from new products generated and developed in Britain, the so called “patent box” concept .

That was immediately followed by an announcement that GlaxoSmithKline would, as a result of the change, invest £500m in the UK. The pharmaceutical giant will open its first new factory in Britain in 30 years, with its chief executive declaring the change will “improve the attractiveness of the UK as a place for the private sector to locate and invest.”
Mr Osborne told MPs that 1,000 new jobs would be created by the GSK investment.

The Chancellor said of his future changes, which will also include reforms to the competition regime: “Some may be controversial if they confront vested interests. But brick by brick we will remove the barriers that are holding Britain back.”

Ministers have been concerned that companies facing higher capital gains tax, increased VAT and employees being hit by the new 50p rate of tax on higher earners, are turning their back on Britain. Treasury officials said the plan was now geared to halt and reverse that trend.

Mr Osborne said: “We propose to make the UK an even more attractive location for international business and investment, by reforming our outdated and complex rules for Controlled Foreign Companies. “We have seen a steady stream of companies that have left the UK in recent years. This Government, unlike the last one, is not content to sit by and watch our competitiveness leach away and our corporate tax base undermined.”

A spokesman for accountants PwC said: “From what I see today it’s going to dramatically alter the tax rate for thousands of companies in the UK, meaning potentially some will have £14 more from every £100 of taxable revenue to reinvest in the business. It could potentially bring billions of investment to the UK.”

Osborne said: “The economy is growing. More jobs are being created. The deficit is falling at a time when markets are gripped by fears about government finances across Europe, today we see that the Government was absolutely right to take the decisive action to take Britain out of the financial danger zone. Britain is on course both to grow the economy and balance the books – something some people repeatedly said would not happen.”

Brave words, courageous actions and to date the Coalition have got it right. Could George Osborne be having the luck to be the new Teflon man of British politics as well as the most influential person according to recent polls?


Author: Chris Slay

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