Ensuring Britain's economic stability

It was necessary for the government to act this week to reassure the markets of Britain's fiscal discipline and ensure our country’s economic stability. That is why the government has now decided to keep the increase in corporation tax that was planned by the previous government. 

  • This will act as a down-payment on our full Medium Term Fiscal Plan which will be accompanied by a forecast from the independent OBR. The government will control the size of the state to ensure taxpayer's money is always well spent.
  • We all want to live in a country where people can get good jobs, new businesses can set up and families can afford a better life. We will get through this storm and deliver the strong and sustained growth that can transform the prosperity of our country for generations to come.

The government will do this by:

Delivering Growth and Stability

  • Growing the economy: this remains the key challenge to help protect living standards for everyone, especially the less fortunate, and to protect and improve public services. Since the 2008 financial crisis this country has been held back by consistently weak growth, which has made us all poorer. Restoring a low tax, high wage, and high growth economy is the Conservative government's priority, and will make the country richer and better off.
  • For growth, businesses and households need stability. Conservatives understand that – it is why we acted rapidly to help businesses and households with their energy costs this winter. But it is also true that Britain is not alone – global economic conditions are worsening due to the continuation of Putin’s illegal war in Ukraine and the aftershocks of the pandemic.
  • The government recognise this and will act to reassure markets of  its commitment to financial stability. It is clear that parts of the mini-budget went further and faster than markets were expecting. The PM has recognised the need to act to rectify that and has therefore decided that the way that we deliver our mission needs to change.
Maintaining fiscal discipline

  • The government will restore fiscal discipline now. Given the exceptional circumstances we are committing to keep the increase in corporation tax that was planned by the previous government. This will raise £18 billion per year, and act to restore the public finances and market confidence in the UK’s fiscal discipline.
  • We must and will put our finances on a firm footing in the longer-term. This change will act as a down-payment on our Medium Term Fiscal Plan which will be accompanied by a forecast from the independent OBR. We will do whatever is necessary to ensure that debt is falling as a share of the economy in the medium term. 
We owe it to the next generation to improve our economic performance. That is how we will deliver higher wages, new jobs, better public services, and how we will ease the burden of debt. The new Chancellor, Jeremy Hunt, one of the most experienced and widely respected government ministers, shares that conviction and will help us deliver this mission in the national interest. 


Protecting small businesses

  • SMEs will be protected from the rise in tax. The government will retain the small profits rate introduced in the 2021 Finance Bill, so that businesses with profits under £50,000 continue to pay 19 per cent and businesses with profits under £250,000 pay a reduced rate. Around 70 per cent of actively trading companies will be protected from a rate increase.

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