A group of MPs and small businesses are tearing into Alistair Darling over an upcoming increase in corporation tax for small businesses.

The tax was announced by Gordon Brown in the 2007 Budget, and was controversial then, but now it is seen as cruel and unusual.

MPs, including Labour ones, have signed a petition to get the increase repealed while The Daily Mail and the Federation of Small Businesses are on the war path – demanding a tax cut!

Darling must be having sleepless nights and will have a job making anyone happy via his pre-Budget report later this month. Realistically, in the medium-to-long-term taxes can only go one way – and it ain’t down!

Look out for short-term dilluted fiscal stimulus followed by a big back lash at the first sign of a return to normalcy. Read more about it here.

Recent events have turned the spotlight on the government’s anaemic response to UK businesses’ troubles.

Barack Obama says: “Yes we can!”; Gordon Brown says: “Let’s form a committee to discuss whether we can or not and then at a later date make a decision which will underpin ongoing discussions”.

Obama’s economic pledges may be a tad unrealistic: he’s facing a gigantic budget deficit approaching half a trillion dollars and drooping economic growth, yet he wants to cut income tax for 95 per cent of Americans and abolish capital gains tax.

But he’s making the right noises. And what an impact his words have made. In contrast, the UK government’s response to the crisis has been tentative and mediocre, leaving British business confidence flat as a pancake.

Read the full article here.