George Osborne is planning to slash corporation tax to less than 15 per cent in an effort to woo business deterred from investing in a ‘postBrexit’ Britain as part of his new ‘fivepoint’ plan to galvanise the economy. You can change your cookie settings at any time but parts of our site shan’t function correctly without them.
He told the Financial Times, while the chancellor did not backtrack on his warning that leaving the EU could push the country into recession. We must focus on the horizon and the journey ahead and make the dozens of the hand we’ve been dealt. Besides, while laying out plans to build a super competitive economy with low business taxes and a global focus, In his first interview since Britain voted to leave the EU, Mr Osborne said he wanted a leading role in shaping Britain’s new economic destiny.
Whenever announcing a target of less than 15 per cent, down from 20 per cent now, Mr Osborne wants to set the lowest corporation tax rate must get on with it to prove to investors that the country was still open for business. Such a sharp cut in business taxes will take Britain close to the 125 per cent corporation tax rate in Ireland and will anger EU finance ministers who fear a race to the bottom. The move could also alienate voters, given recent controversies over tax deals struck with multinationals similar to Google.
The head of tax at the OECD had warned, in an internal memo cited by Reuters, that the fallout from Brexit may push the UK to be even more aggressive in its tax offer but that further steps in that direction will really turn the UK into a tax haven economy type. Follow the twists and turns with UK ‘Politics our’ free email briefing on any day’s main political developments.
While ensuring support for bank lending, redoubling efforts to invest in the Northern powerhouse and maintaining the UK’s fiscal credibility, Beside the tax cut, the chancellor said his fivepoint plan included focusing on a new push for investment from China.
Whenever awaiting official forecasts before announcing any new measures in the Autumn Statement, He is now striking a more cautious note. Before the referendum Mr Osborne had threatened to make 30bn of tax rises or spending cuts in a postBrexit emergency Budget.
The chancellor accepted that Britain faced a very challenging time and urged the Bank of England to use its powers to avoid a contraction of credit in the economy, reminiscent of the squeeze throughout the height of the financial cr in 2008. It has many options available to maintain the flow of credit to companies and households even if many are reluctant to borrow in current circumstances. Of course, the BoE will publish the results of its Financial Policy Committee meeting on Tuesday.
Despite the expected shock to the public finances, he also called for the next prime minister to continue investing in the HS2 rail project from London to the north and ‘trans Pennine’ rail improvements and approve a new third runway for the southeast.
Even though his friends say he would like to continue at the Treasury or move to the Foreign Office if offered the chance, he said he was not backing anyone at the moment in the Conservative leadership contest.
Andrea Leadsom, the proBrexit former Treasury minister, is also winning favour with some Tory MPs, a bit of his allies have already thrown their weight behind Theresa May. Ahead of the first ballot on Tuesday. Conceded that could’ve been curtailed by the fact that voters in last month’s referendum also need restrictions on EU migration, mr Osborne said whoever becomes prime minister should seek maximum access to the EU single market for Britain’s goods, services and financial services. Letters in response to this report
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