Written by: Keith Tully
Published: 4th July 2016
Chancellor George Osborne has said he’s planning to take the UK’s rate of corporation tax to below 15 per cent.
Speaking during an interview with the Financial Times, Mr Osborne said he wants to ensure that current and prospective investors into the UK understand that the economy remains “open for business” as plans are made for Britain’s exit from the European Union.
The chancellor was in support of the UK remaining part of the EU but with that case having been lost, he suggested that he wants the country to work towards becoming a “super competitive economy”.
According to Mr Osborne, low business taxes will need to be a key aspect of that effort.
“We must focus on the horizon and the journey ahead and make the most of the hand we’ve been dealt,” the chancellor is quoted as saying.
However, a move to bring down the UK’s corporation tax rate towards what would be among the lowest of any major economy could anger other nations and potentially alienate large numbers of British voters.
Mr Osborne insisted in his interview that he intends to play a significant role in the way the UK economy is orientated as plans for the country’s withdrawal from the EU are put together.
He suggested though that the British economy faces a “very challenging time” and did not backtrack on his assertion that a referendum vote in favour of the UK leaving the EU could push the country into recession.
That referendum vote came despite Mr Osborne’s warnings and saw his long-term political ally David Cameron announce his intention to step down as prime minister.
In a politically and economically turbulent few weeks since, the governor of the Bank of England Mark Carney has sought to calm financial markets and indicated that the UK’s base rate of interest could soon be lowered.
Osborne told the FT that the bank should look to use its powers to prevent “a contraction of credit in the economy” in the coming months.
He also said he intends to push for greater investment in the UK from China and to see more funds allocated in support of the creation of a so-called Northern Powerhouse in the north of England.