Britain’s biggest defence contractor BAE Systems slams the hike in UK corporation tax and says it is hampering UK growth
- Rate was raised from 19% to 25% this year despite opposition from business
- BAE contributed £11billion to the economy last year, equivalent to 0.4% of GDP
Britain’s biggest defence contractor has slammed the hike in UK corporation tax and said it was hampering UK growth.
Brad Greve, finance director at BAE Systems, is the latest executive to lash out at the tax, which was raised from 19 per cent to 25 per cent earlier this year despite a chorus of opposition from business.
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‘Our corporation tax doesn’t help to encourage growth because it limits what we can do on the really critical capital investments that we want to do into the economy,’ Greve told The Mail on Sunday.
Business leaders from ITV boss Carolyn McCall to Wetherspoons chairman Tim Martin voiced their opposition at the time the tax rose.
Drugs giant AstraZeneca revealed that rather than build a £320 million factory in England, it had decided it would do so in Ireland because of its low-tax environment.
Unhappy: Brad Greve is the latest executive to lash out at the tax, which was raised from 19 per cent to 25 per cent
Greve said BAE, which employs nearly 40,000 people in the UK and builds naval ships, fighter jets and submarines, appreciated the ‘strong support’ it had received from the Government’s national security and defence policies.
But he added: ‘We of course, like most companies, appreciate the carrot aspect of taxation as opposed to the stick.
‘We think incentives are helpful in growing an economy, so we of course think lower corporate tax rates are healthy for growth.’
Greve was speaking as BAE published research from Oxford Economics showing the company contributed £11 billion to the UK economy last year, equivalent to 0.4 per cent of GDP.
The figure includes £770 million paid directly to the Treasury through national insurance and corporation tax.
More broadly, the report said, it also funds world-leading research and supports 49,000 jobs throughout its supply chain, plus thousands more in the communities where it operates, including its aerospace hub in Lancashire, submarine plant in Cumbria and shipyard in Glasgow. The company’s own workforce has grown by more than 10 per cent since 2020.
Altogether, the report estimates, the company supports 132,000 jobs nationwide.
‘If it’s all done right, it means that everything grows, but the problem comes when you get a little bit too tilted towards one end of the taxation spectrum,’ Greve said.
‘What we’d like to see more of is incentives to invest in things that the Government cares about, like net zero.’
‘If there were more incentives, I think that would just accelerate investment in these critical areas of technology to bring the economy to net zero faster.’