Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential impact of tax rates in other G7 countries on economic growth in the UK since June 2021.

The UK is an open economy and so its economic growth will be affected by developments in its trading partners, including any impact from their fiscal policy. Despite global headwinds, the UK economy was the fasting growing economy in the G7 last year according to the IMF Global Outlook released in October. It suggested the annual Real GDP Growth Rate in the UK reached 7.4% last year, while France (the second fastest growing G7 economy in 2021) reached 6.8%.

In the March 2022 Economic and Fiscal Outlook (EFO), the OBR projected the tax-to-GDP ratio to rise to 36.3% in 2026/27. Internationally, tax-to-GDP ratio in the UK is lower than in Germany (38.3%), France (45.4%) and Italy (42.9%) and higher than in the USA (24.5%), Japan (32.0%) and Canada (34.4%)