Cut business tax, says Liam Fox

The Government should make cuts to taxes on business in next month's Budget, according to Liam Fox. Writing for the Financial Times, the former defence secretary said the Government should cut employers' national insurance contributions and make it easier for companies to recruit and fire staff.

Mr Fox claims that cuts to business tax should take precedence over the Liberal Democrats' demands to raise the income tax threshold. "Although the coalition agreement may require the Chancellor to raise personal tax allowances (which should be paid for with spending restraint not new taxes) he should use the proceeds of spending reductions to cut employers' national insurance contributions across the board. If that is deemed impossible, he should consider targeting such tax cuts on the employment of 16 to 24-year-olds, making them more attractive to employers."

The Confederation for British Industry has also called for the chancellor to provide a £500 million boost to business by making changes to the tax system and stimulating growth.