Neil O’Brien, MP for Harborough, has received backing from several of the Conservative Party Leadership candidates for his new report, ‘firing on all cylinders’.
The report published through think tank Onward, looks at how to boost growth and help low earners. Within the report, Neil demonstrates the potential for £190 billion to drive growth, cut tax for the poorest and fund public services.
Neil said, “In this year’s spending review it’s time to turn on all the taps and make sure that poorer families and poorer areas really feel the benefit of a growing economy. We’ve got to invest in strong public services like schools and the police, but we also need to take back control of the economic debate and start talking about how we get productivity growth and wages really moving.
The way to build a strong economy is from the bottom up. More geographically balanced economies are stronger. Tax cuts and changes to benefits that are focused on helping low income working families will raise employment and growth. We need to cut Britain’s uniquely high taxes on investment, and tackle Britain’s chronic under-investment once and for all. And we must learn from countries like Ireland which have used low taxes to attract vast inward investment, which has transformed their economy, and seen their living standards overtaking ours.”
The report and its findings have been welcomed by Conservative Leadership candidates, Michael Gove, Matt Hancock, Jeremy Hunt, Sajid Javid and Esther McVey.
It sets out 6 key tax and spend priorities:
- Investing in public services, particularly schools, the police and prisons. This includes taking per pupil school funding to a record high, and growing the number of police and prison places to fight crime.
- Dramatically cutting tax on business investment by increasing capital allowances by 50%, to tackle Britain’s problem of chronic under-investment. Fixed investment in Britain has been lower than the OECD average in every year but one since 1960.
- Cutting tax more in poorer areas, and rebalancing key types of spending. As well as increasing capital allowances across the board, the report also suggests even higher capital allowances in poorer areas, to attract vital private inward investment there. It also suggests rebalancing the most growth-enhancing types of public spending like transport and R&D spending towards poorer areas.
- Setting a roadmap to cut corporation tax to the Irish rate of 12.5%, learning from the way Ireland has used low tax rates to attract inward investment from some of the world’s most innovative, high growth firms. This has transformed productivity, and led to Irish income per head overtaking Britain.
- Boosting incomes and employment for working families by raising the National Insurance Primary Threshold to £13,000 for people with children. This would recognise children in the tax system for first time since the 1970s, and would raise post-tax income by up to £1,100 for a two-earner couple.
- Further increasing incomes and employment for the poorest working families by turning UC into “UC Plus”. This would involve dramatically increasing UC Work Allowances and creating a separate work allowance for second earners. This would increase incomes for low income working households by up to a further £4,300 for those who benefit most.