On the eve of the Spring Budget, David Gauke MP, the Financial Secretary to the Treasury, addressed a small table of Business Forum members about pensions, tax reform and the future of Britain as a business centre.
Gauke, MP for Hertfordshire South West, talked of the progress the Coalition has made in terms of reducing pensioner poverty, unemployment, and the deficit whilst increasing access to finance, national insurance contributions and overall economic growth. Introducing flexible pensions, which allowed savers to access their money, has proved not only popular but also good for the Treasury’s coffers, Gauke argued. It showed that the government had confidence in its citizens to take out their pensions not to buy the proverbial Lamborghini but to make their later years more comfortable.
Gauke said that other important steps in pensions policy had been the new single tier pension scheme and the auto enrolment for pensions. He admitted that saving for a pension was not part of the national character: only a third of Britons surveyed said they were saving for retirement. Similarly worrying was the rate of personal debt in Britain, which has quadrupled in recent years
For the UK to remain a global leader in business, Gauke stressed, its tax policy had to be attractive for companies. This explained why the Coalition was lowering the corporation tax soon to be 20%—the lowest rate among the G20; and why it had lowered the rate of individual tax from 50% to 45%.
This move, attacked as ‘millionaire’s tax cut’ by the left, had in fact proved necessary as the 50p rate didn't generate revenues. Research and Development credits and capped business rates increases helped boost Britain’s appeal to business.
Today, Gauke claimed, Britain boasts the most competitive tax system among the G7 countries—and Britain’s economy has grown faster than any other EU economy over this parliament.
This discussion, which took place as part of the Legatum Institute's Business Forum, was moderated by Cristina Odone, Director of Communications at the Legatum Institute.
About the Speaker
David Gauke was appointed Financial Secretary to the Treasury in 2014 and was previously Exchequer Secretary to the Treasury. As Financial Secretary to the Treasury, Gauke’s portfolio includes: strategic oversight of the UK tax system including corporate and small business taxation; the EU Budget and wider EU issues; deputising for the Chancellor at the Economic and Financial Affairs Council (ECOFIN) and personal savings and pensions policy, amongst others. Previously, as the Shadow Treasury Minister from 2007, he focused on tax policy, including tax simplification, corporation tax reform and HM Revenue and Customs, prior to which he sat as a Member of the Treasury Select Committee. He was elected an MP, for Hertfordshire South West, in 2005. He qualified as a solicitor in 1997 and worked for a leading City firm before entering Parliament.