However, Mr Osborne told the Financial Times that a national effort was necessary to make Brexit work, as Britain faces possible financial risks including a recession.
Advertisement
The 28-nation European Union gave a frosty reception to the plan, however, saying it would raise the threat of a competitive series of corporate tax cuts as countries try to lure firms to their shores.
In an interview with the Financial Times, the chancellor said the cuts were part of a plan to galvanise the economy and woo businesses that may be unsure of their British allegiances following Brexit. He laid out a five-point plan for proving that the United Kingdom remains “open for business”.
In an interview with the Financial Times, Mr Osborne outlined his plans to give the United Kingdom the lowest corporation tax of any major economy.
The pound fell to a 31-year low against the dollar in the wake of the Brexit result and the UK’s credit rating has been downgraded, both of which make it more costly for the country to borrow.
“A further step in that direction would really turn the United Kingdom into a tax haven type of economy”, said Pascal Saint-Amans, head of the Organisation for Economic Co-operation and Development (OECD), in a memo dated 24 June reported by Reuters.
He added, “A further step in that direction would really turn the United Kingdom into a tax haven type of economy”, but there were practical and domestic barriers to do this.
Some believe the UK’s corporation tax rate should be as low as 10%. It could also alienate voters who opposed the deals handed to companies such as Google.
George Osborne wants the world to know that Britain is still “open for business”.
“However, input costs remain high and the Chancellor needs to look at lowering the overall cost of doing business here in the United Kingdom in order for this measure to have any meaningful effect on the ground”.
The Chancellor said he hoped a post-Brexit deal would include some access to the European Union single market: ‘The priority is getting our new relationship with Europe in place and right and that means putting the greatest emphasis on having the best possible trade in goods and in services including financial services’.
But Mr Osborne admitted he now had to be “realistic” given evidence of economic shock from the Leave vote.
Advertisement
The Labour Party also accused Osborne of trying to turn Britain into an offshore tax haven. The UK’s larger population would not be outsized by the potential investment by business.
