Sunak and Yellen Square

The UK needs to be competitive – not EU compliant

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WITH THE RECENT reshuffle, Prime Minister Boris Johnson has finally demonstrated a willingness to look beyond Covid-19 and actually consider how he will shape the future of the UK’s economy and society in the years to come. Key to this has been the ambition to embrace the so-called levelling up agenda and examine how the UK can properly separate from or adapt EU legislation which has been copied into UK Law, as part of Brexit.

While this seems to have ticked the right boxes there is, however, still a trend within Government to not only take too long to make decisions – such as replacing GDPR with a UK-specific alternative – but also a failure to take a cohesive and holistic approach about how we can achieve what the PM loves to refer to as ‘Global Britain’. These failures not only scream of excessive bureaucracy, unable to work efficiently, but they reduce the capacity of the UK to encourage further economic growth.

One such critical example is the decision by the UK Government to back and promote the idea of a global minimum rate of Corporation Tax, originally proposed by President of the United States Joe Biden and now also supported by the EU. Such a policy makes a mockery of an independent UK’s sovereignty, by giving up the ability of this and future UK Governments to make their own decisions. It also reduces the ability of the UK to differentiate itself from competitors in the market – a chance which should be vital in helping to develop new investment opportunities and jobs here in the UK in the years after Brexit.

What makes this an even more significant mistake is the fact our exit from the European Union coincides with a clear decision by the EU to step up their policing of compliance with EU regulations within Member States, with the Republic of Ireland (RoI) a major target of their efforts. The bureaucrats in Brussels cannot claim to need to enforce all EU rules in Northern Ireland as part of the Northern Ireland Protocol if the RoI does not meet those same standards. Not only is the RoI the UK’s closest competitor geographically – with its own land border – it is also the country with one of the lowest rates of Corporation Tax in Europe. A low tax rate which attracts numerous major companies to position their headquarters in the country instead of the more globally recognised hub of the UK.

With the EU’s attempts to enforce the minimum rate of Corporation Tax across all Member States, as well as imposing regulations more forcefully surrounding controversial issues – including data laws – breaking away from the EU’s policies offers far more benefits than ever before. There will undoubtedly be companies currently based in the EU which will be searching for serious alternatives for their European headquarters, and if the UK cannot offer this, then they will simply stay put or look elsewhere, depriving our economy of a boost we so desperately need as we recover from the Pandemic. And this is one uplift which should be easily attainable.

If the Prime Minister is really committed to making the most of Brexit to create new opportunities for the UK, then this will require the PM to increase the pace when it comes to adapting or removing laws we copied over from the EU, as well as breaking the obsession those in Whitehall have with trying to sign up to globalist policies which, while well intentioned, do nothing to help the UK put its own priorities first.

We can fully expect the EU to try and do all it can to diminish the reputation of the UK within the business community, as well as trying to erect barriers to try and stop companies wanting to move to the UK. Instead of playing into the EU’s hands by limiting our choice of economic policies, we should be demonstrating why the UK is the best place to do business, after all, a much better way to combat the EU’s own false narratives would be to blow them out the water with hard evidence of a UK which intends to set its own path on the world stage.

Photo of UK Chancellor Rishi Sunak and US Treasury Secretary Janet Yellen before their discussion on a minimum rate for Corporation Tax.

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