Labour's Budget tax raid threatens to damage growth, experts warn

LABOUR tax hikes in next week's Budget could damage UK competitiveness and growth, a leading think tank has warned.

- Katie Harris

Today Britain is unveiled as 30th out of the 38 biggest developed nations in the annual International Tax Competitiveness Index.

The Centre for Policy Studies (CPS) says the poor ranking will be a barrier to attracting foreign investment and is at risk of dropping.

Economic All the countries are part of the Organisation for Cooperation and Development (OECD), which was founded in 1961 to stimulate world trade.

Top of the list is Estonia with Australia at No13, Germany at 16 and the US at 18.

CPS researcher Daniel Herring said: "There's a real danger that Britain could end up with one of the least competitive and most anti-growth tax systems in the OECD if the expected tax rises come to fruition in the Budget. If Labour really wants long-term economic growth, it needs to get serious about fundamental tax reform.

"The way we raise tax is damaging incentives, getting in the way of innovation, and undermining productivity. To not use this Budget to put the tax system on more pro-growth footing would be a wasted opportunity."