Financial Times: Let the regions reduce tax and then watch them grow

Sir,

Graham Gudgin and Victor Hewitt ("Regions must build their case for lower tax rates", July 18) are absolutely right in their analysis. The best way to help the less prosperous regions in the north, now and in the future, is to allow them to attract new businesses by lowering their corporate tax rates. This is the strategy that has been pursued with such success in recent years by the poorer members of the European Union.

Instead our new prime minister plans to accelerate regional growth by giving extra responsibility to the regional development agencies, with an annual budget of more than £2bn, despite there being no objective measure of their success. Indeed, productivity growth has stalled since the agencies were set up.

Treasury ministers need to consider seriously the prospect that allowing regions to reduce tax rates would do their hard work for them. Such clear thinking would benefit taxpayers in all parts of the country.

Yours,

Corin Taylor

Research Director,

The TaxPayers' Alliance

London SW1H 9JA