04:01 GMT23 June 2021
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    UK Prime Minister Boris Johnson announced on Tuesday that he would drop corporate tax cuts he had promised in April. While it may initially seem like a new direction for the historically low-taxation Conservative Party, elections campaigns have a tendency to make political leaders unveil policies for votes rather than results.

    Kevin Dowd, a professor of finance and economics at the University of Durham gave a less than enthusiastic response to Boris Johnson's spending pledges, saying that the prime minister has no "grand economic vision".

    "Johnson is anything but consistent. He makes decisions off the cuff and I don't think he has any grand economic vision, as such. It's all image management and short-term politicking", the prof noted.

    When asked why the Conservatives have made significant shifts recently in spending proposals, including shelving a previously-promised tax cut to free up £6bn annually for the NHS and other priorities, Dowd said: "My sense is that the Tories are sensitive to opposition claims that they are soft on business and don't really care for public services. So the Tories will sometimes try to head off such criticisms by reversing proposed tax cuts (as in this case) or throwing yet more money at public services," adding that "the Conservatives are very sensitive to the 'party of big business' jibe." 

    Dowd rebuked the idea that the policy change was based on "seriously thought-through policy" and was instead simply an attempt to grab headlines.

    "Pure politics. 'Need a headline for the day. Oh, that will do.' Typical Johnson. One wonders what more nonsense will follow".

    While less than enthusiastic toward a reversal of character by Tory leadership, Dowd did identify a stark contradiction between its simultaneous election messages of tax cuts raising revenue while postponing tax cuts.

    "What is interesting, however, is that the government had previously said that cutting corporate taxes would raise revenue. Such a Laffer Curve argument is plausible, especially for a corporation tax rate of 19 percent. But if that argument is correct, then cancelling the tax cut will not raise revenue. If they wanted to raise revenue they should have gone ahead with the tax cut! I don't think they have thought it through. In fact, I don't think any of the main political parties except the Brexit Party have thought anything through. I find it increasingly difficult to take them seriously".

    Dowd's comments follow speeches by Johnson and opposition leader Jeremy Corbyn at the Confederation of British Industry (CBI) on Monday, seeing the prime minister attempt to alarm business leaders by invoking the image of a Corbyn-led Labour government after the 12 December election.

    ​Claiming that "Jeremy Corbyn who would whack it back up to the highest levels in Europe”, despite Labour's tax policy increasing corporate tax to 29 percent, still less than the centre-right governments of Belgium, France, and Germany.

    Dowd's comment regarding government attempts to avoid being flanked from the left on spending is a direct reference to the marked shift of Labour policy in the direction of further state-investment and interventionism; proposing to take industry such as rail, water, and broadband into public ownership and give workers more influence in the running of business, all under the umbrella of the economic programme of a Green Industrial Revolution.

    Labour has capitalised on the portrayal of the Conservatives as the party of the wealthy, an electoral message which saw them remove a Conservative majority despite consistent subpar performances in national polls.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.


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