George Osborne reassures Wall Street: UK won't become 'Little Britain'

Wall Street Bull

George Osborne has promised American bank bosses that a post-Brexit Britain will “do everything we can to make the UK the most attractive place in the world to do business”.

The chancellor toured Wall Street banks on Monday as he began a mission of “selling Britain to the world” in the wake of the UK’s decision to leave the European Union.

“We’re out there selling Britain to the world,” Osborne said on MSNBC’s Morning Joe on Monday as he began his tour of global financial powerhouses, which will also see him travel to China and Singapore in the coming weeks. He conceded that “it’s going to be a challenge” but said the UK would not become “Little Britain” and instead would reposition itself as “a beacon for free trade, democracy and security, more open to that world than ever”.

“We are not turning in on ourselves as a country,” he said. “We may be leaving the EU, but we are certainly not leaving global free markets, free trade ... a place where global business can come and do business.”

Asked on MSNBC if there was anything that could be done to prevent Britain actually leaving the EU following the referendum vote, Osborne said the people had spoken, and while he was personally disappointed, the government would take its instructions from the voters.

“You can’t take the East German view that ‘the people are wrong, and we need to elect new people’,” he said. “We are strong democracies. When the people speak, the politicians need to take that instruction.”

However, Osborne said he viewed the 52% vote to leave as an instruction to make Britain more, not less, global. “We made the decision to leave, but we have now got to make a decision about what kind of country we want to be,” Osborne said. “And I don’t want us to be a Britain that turns in on itself, becomes less tolerant, becomes more divided.

“I want us to interpret the result as an instruction for Britain to be more outward-facing, to have stronger economic and trade ties with, for example, the United States.”

The US is the largest single destination for UK exports, and the UK is America’s largest trading partner in Europe. In 2014 UK exports to the US were worth £88bn – or 17% of total UK exports – and the UK is the US’s sixth-largest trading partner.

The chancellor’s mission to the US came as the S&P 500 index hit a record high and London’s FTSE 100 officially became a bull market – up 20% from a recent low.

His visit was kicked off with an opinion piece in the Wall Street Journal, where Osborne wrote that a post-Brexit Britain “must start with a closer economic relationship with North America”. He said he had spoken with with the House speaker, Paul Ryan, “several times in the past two weeks about a stronger trading relationship”. His overtures come after Barack Obama said Britain would be “at the back of the queue” for a new trade deal if it voted to quit the EU.

Osborne will also meet the US treasury secretary, Jack Lew, in London in the coming days.

Osborne has already spelled out a future for a post-Brexit UK as a low-tax financial and corporate centre. He has set a goal of reducing UK corporation tax to less than 15% to try to prevent multinational companies from uprooting their headquarters from Britain.

UK corporation tax currently stands at 20%, down from 28% when Osborne took office in 2010. The average corporation tax rate in the G20 was 28.7% in January 2015, according to the Oxford University center for business taxation.

The Organisation for Economic Co-operation and Development has warned that cutting company taxes further “would really turn the UK into a tax haven type of economy”.

In recent years, UK companies have left Britain for Ireland, where the corporate tax rate is 12.5%.

The Bank of England is this week expected to cut interest rates, which are already at a record low of 0.5%, to improve sentiment.

Powered by Guardian.co.ukThis article was written by Rupert Neate in New York, for The Guardian on Monday 11th July 2016 17.58 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010

 

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