Group warns that Brexit is being built by UK Government on tax avoidance and inequality
CAMPAIGNERS against tax avoidance and corporate power have slammed any plans by the UK Government to slash corporation tax to 10 per cent.
The proposed plan, reported in the Sunday Times, would only be carried out if the UK Government is unable to gain access to the EU single market in the forthcoming negotiations with the 28 member state bloc.
The anti-corporate influence group Global Justice Now Scotland has stated that the alleged plans of the UK Government are in line with previous economic decisions and support for trade deals such as Ttip, which they say favour corporate entities over national sovereignty and inequality.
“The UK government has facilitated this rise in corporate power through tax structures, like this cut in corporation tax, its enthusiastic support for trade deals such as TTIP, and even aid programmes that help big business.” Liz Murray
Speaking to CommonSpace Liz Murray, head of Scottish campaigns for Global Justice Now, said: “The vast wealth and power of corporations is at the heart of so many of the world’s problems – like inequality and climate change.
“Recent research that we carried out showed that 69 of the top 100 economic entities in the world are corporations not countries, and that Walmart, Apple and Shell are richer than Russia, Belgium and Sweden.
“The UK government has facilitated this rise in corporate power through tax structures, like this cut in corporation tax, its enthusiastic support for trade deals such as TTIP and even aid programmes that help big business.”
The Sunday Times cited what it claimed was a treasury leak, that the UK Government could slash corporation tax to 10 percent if the EU refuses to agree a post-Brexit free trade deal or blocks UK-based banks from accessing its market.
The comments came a week after EU president Donald Tusk told a press conference that the UK had an option between “hard Brexit” and “no Brexit”. This suggested that his position was that the UK can not expect the EU in any of its negotiations to surrender any of the so-called “four freedoms”, freedom of movement of goods, capital, services, and most contentiously, people.
“Being outside the EU will always outweigh the value of this cut for multinational corporations.” Richard Murphy
There has been increasing tension between the EU institutions, member states and the UK Government as freedom of movement was seen to be a major factor in the victory of a Leave vote in England and Wales.
Richard Murphy, director of Tax research said: “First, we would lose over £20 billion of tax revenue a year. That’s one third of the total forecast UK deficit. There’s not a shred of evidence that we would recover any of this from alternative new taxes.
“At best such a tax cut might keep some business in the UK that would otherwise leave, but there is almost no chance business will now relocate to the UK because it is widely known that tax is usually fifth or sixth on any criteria ranking for location decision making.
“Being outside the EU will always outweigh the value of this cut for multinational corporations.”
However, the floating of the idea to slash corporation tax could be motivated by moves by banking sectors in Frankfurt, Dublin and Paris to try and draw banking talent away from London. Michael Kemmer, head of the Association of German Banks, which represents the country’s biggest lenders such as Deutsche Bank and Commerzbank last week urged German lawmakers to do more to tear financial workers away from London in the aftermath of Brexit.
A tax cut could be used to try and persuade the EU to grant "passporting" rights for financial service firms to continue operating across the EU.
Picture courtesy of Wolfgang Staudt
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