Osborne's position is safe, insists Downing Street: No 10 dismisses talk of Hague moving in as Chancellor
Downing Street guaranteed George Osborne will stay in his job until 2015Some Tories called for William Hague or Philip Hammond to take the positionTory high command is quietly encouraged
by positive signs in the economySource said that the more you criticise Cameron's team the less likely he is to change it
00:13 GMT, 1 April 2013
02:13 GMT, 1 April 2013
Downing Street guaranteed George Osborne will stay in his job until 2015 last night as the Treasury hailed a new corporation tax cut as a way to boost the faltering economy.
Senior sources close to the Prime Minister dismissed calls from some Tories for the Chancellor to make way for either Foreign Secretary William Hague or Defence Secretary Philip Hammond if economic growth continues to flatline.
One senior Conservative said to be ‘at the heart’ of the party, speaking on condition of anonymity, told The Sunday Telegraph: ‘George is the problem.’
George Osborne is guaranteed to keep his job until 2015 according to Downing Street
But a Downing Street source said the idea Mr Osborne would be shifted before the next election was ‘complete nonsense’.
One MP who is often critical of the party leadership added: ‘The people who are calling for George’s head won’t get anywhere because actually the Budget was not only not a shambles but had a pretty coherent message about hard work and aspiration that we can sell on the doorstep.
‘You’d think some my colleagues might also have worked out by now that the more you tell the Prime Minister someone on his team is useless the less likely he is to get rid of them.’
Tory high command is quietly encouraged by positive signs in the economy, and believes new business tax cuts taking effect this week will help kickstart growth.
In May 2010 when Mr Osborne became Chancellor, corporation tax for large firms was 28 per cent, but he has repeatedly cut the tax since coming to power to spur the private sector.
Today [1 apr] it will drop from again from 24 per cent to 23 per cent, the latest in a series of staggered decreases towards 20 per cent in April 2015, the lowest of any major economy in the world.
It had been rumoured that William Hague (left) or Phillip Hammond (right) might take the Chancellor's job
The latest cut to 20 per cent will save businesses around 2billion over the next four years, according to an official forecast by the Treasury.
Mr Osborne said: ‘The cuts send a message to anyone who wants to invest and create jobs in this country that Britain is open for business.’
But experts yesterday warned the tax cut could be overshadowed for many firma by a hike in business rates, also scheduled to take place this week.
Official figures show business rates will be worth nearly 27billion this year. The CBI, Britain’s biggest business lobby group, welcomed the cut in corporation tax, but urged the Chancellor to ‘go further to make taxes across the board more competitive.’
Katja Hall [corr], chief policy director at the CBI, singled out business rates which – unlike corporation tax – companies must pay even if they are struggling to survive.
She said: ‘Ministers need to look urgently at easing the burden of business rates for firms at the frontline of consumer spending.’
For example, many small retailers are losing money which means they do not pay corporation tax because it is only levied on a firm’s profits, but they must still pay business rates.
The CBI is calling for a two per cent cap in business rate increases, which it says would cost a ‘modest’ 140million.
At present, the annual increase, which comes into force this month [apr], is linked to the previous September’s RPI figure, which was 2.6 per cent.
The CBI warned: ‘For small and medium-sized businesses, business rates are typically the largest expense after staff and rent costs.
‘A pound spent on rates is a pound that could have been used by a small and medium-sized business to invest and grow.’
John Longworth, director general of the British Chambers of Commerce, said recently: ‘Companies are crying out for relief from relentless annual rises in business rates for years.’