BAE finance boss hits out at rise in corporation tax
Britain’s largest defense contractor, BAE Systems, denounces UK corporate tax increase, saying it is hampering UK growth
- The rate was raised from 19% to 25% this year despite opposition from the business community
- BAE contributed £11 billion to the economy last year, equivalent to 0.4% of GDP
Britain’s largest defense contractor has criticized Britain’s corporate tax increase, saying it is hampering UK growth.
Brad Greve, chief financial officer at BAE Systems, is the latest executive to lash out at the tax, which was raised from 19 percent to 25 percent earlier this year despite a chorus of corporate opposition.
“Our corporate tax doesn’t help encourage growth because it limits what we can do about the really critical capital investments we want to make in the economy,” Greve told The Mail on Sunday.
Business leaders from ITV boss Carolyn McCall to Wetherspoons chairman Tim Martin expressed their opposition to the time the tax was raised.
Drugs giant AstraZeneca revealed that instead of building a £320 million factory in England, it had decided to do so in Ireland due to the low tax environment.
Unhappy: Brad Greve is the latest executive to lash out at the tax, which was raised from 19 percent to 25 percent
Greve said BAE, which employs nearly 40,000 people in the UK and builds naval vessels, fighter jets and submarines, appreciated the “strong support” it received from the government’s national security and defense policy.
But he added: “Of course, like most companies, we value the carrot aspect of taxation rather than the stick.
“We think incentives help grow an economy, so naturally we think lower corporate tax rates are healthy for growth.”
Greve was speaking as BAE released a study by Oxford Economics showing that the company contributed £11bn to the UK economy last year, equivalent to 0.4% 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 across the supply chain, plus thousands more in the communities where it operates, including its aerospace hub in Lancashire, subsea manufacturing facility in Cumbria and shipyard in Glasgow. Its own workforce has grown by more than 10 percent since 2020.
All told, the report estimates, the company supports 132,000 jobs nationwide.
“If it’s all done right, that means everything grows, but the problem comes when you go a little too much to one end of the tax spectrum,” Greve said.
“What we’d like to see more of is incentives to invest in things the government cares about, like net zero.”
“If there were more incentives, I think that would just accelerate investment in these critical technology areas to bring the economy to zero more quickly.”