Boris Johnson’s and Jeremy Hunt’s Low-Tax Doomsday Plan
Brexit is turning into a race to the bottom on European corporation tax. Brussels should use any renewed Tory push for a trade deal as leverage.
Boris and Jeremy are still clinging to the "Singapore-on-Thames" idea for post-Brexit Britain.
Photographer: Handout/Getty Images EuropeIt was dubbed “Project After”: A secret emergency plan for the U.K.’s Conservative government to pull all of the economic levers at its disposal if Britain crashed out of the European Union without a deal. The ingredients included slashing taxes to woo multinationals, cutting trade tariffs, and boosting investment. The FT’s report of its existence in February didn’t come as a huge shock, given the U.K.’s public ambition to have the lowest business tax rate in the G20. But it was a sign of what Europe would have to contend with in the worst-case scenario: A race to the bottom on corporate tax with its neighbor.
It now looks like the Tories’ Brexit Doomsday plan is becoming the official policy of the two contenders to replace Theresa May as prime minister. Boris Johnson and Jeremy Hunt both dangled tax cuts at the weekend as they prepared the country for life after the EU, whether through a negotiated withdrawal or a no-deal Brexit. Hunt called for a reduction in British corporation tax to “Irish levels” (12.5% currently) to land an “economic jumbo jet on Europe’s doorstep.” Johnson, deflecting questions about his turbulent private life, said he would “turbocharge” the economy with cuts to business and income taxes.