Single-lever policy simulation · taxation
Corporation tax rate change
This report models the effect of raising corporation tax from 0pp (25% main rate) to +5pp (≈+£15bn/yr) — with every other government policy left unchanged — on the public finances, projected over 10 years.
Improves Fiscal pressure, GDP strength and NHS staffing, with little downside in the model.
A single lever moved in isolation — which no real government does. Figures are modelled projections, not predictions. How the model works →
Direct effects
▼GDP strength
slight improvementWhy: Higher corporation tax discourages business investment and expansion
▲Political risk
slight improvementWhy: Corporation tax rate change has no short causal path to political risk in the model. Any movement you see is the tail end of long chains through shared composites (fiscal pressure, public satisfaction, political risk) and will be small.
▼Vacancy fill rate
negligible net effectWhy: Reduced business investment means fewer new jobs and slower hiring
▼International standing
negligible net effectWhy: Corporation tax rate change has no short causal path to international standing in the model. Any movement you see is the tail end of long chains through shared composites (fiscal pressure, public satisfaction, political risk) and will be small.
↯ Why some effects pull against the headline
- The direct effect on GDP strength points one way, but knock-on effects outweigh it — the net 10-year result is an improvement. This tension is the point, not a glitch.
- The direct effect on Political risk points one way, but knock-on effects outweigh it — the net 10-year result is an improvement. This tension is the point, not a glitch.
Knock-on effects
Reached indirectly, as the direct effects propagate through the system. Ordering reflects how the effect spreads, not a literal sequence in time.
Model output — exact figures
Index points on a 0–100 scale. Lower is better for pressure metrics; higher is better for outcomes like GDP and satisfaction.