Chancellor of the Exchequer, George Osborne is in an unenviable spot in the aftermath of Brexit. Before the ill-fated referendum, he had campaigned, along with PM David Cameron to stay in the EU. But that was not to be.
Now his own job is in trouble because any new PM (David Cameron is due step down a few months from now) will likely want their own man taking on the role. It means the Chancellor’s days at the helm of the country’s finances are probably numbered.
The threat notwithstanding, the Chancellor has released a proposal to reduce corporate tax rates in the UK to 15%. The idea is, it will help keep companies in the EU and encourage them to keep investing in the country as the UK itself gets ready to leave the EU.
Chancellor Osborne says his immediate target is to reduce the impact of Brexit
Speaking to Financial Times, the Chancellor said that he accepts the people’s will and now his target is to reduce the economic impact.
The current corporate tax rate in Great Britain is 20% but it was expected to fall to 17% by 2020. But due to Brexit, the Chancellor was forced to reduce the rate ahead of schedule.
Just a year ago, he had promised to achieve a surplus budget by 2020, staking his reputation on it. He also promised to balance the country’s books. But the new situation has changed all that, forcing the Chancellor to abandon his plans.
In the Financial Times interview, he also said that Britons will now have to make a Supreme effort to make the decision (to leave the EU) work. He did not rule out recession either.
The expected cut in corporate tax is an indication of the uncertain future Great Britain faces due to its decision to leave the EU after 4 decades. It is the first major country to leave the EU.
Brexit begins to affect Great Britain’s economy
The referendum has affected the country’s currency badly. The value of the pound has already decreased by 11% since the results broke.
Before the referendum, the Chancellor had announced that he would have to make cuts to the budget and boost tax rates if the people voted for leaving the EU. He hasn’t acted on that threat yet. He is probably afraid of the public back lash if he does so.
The political scene is also rife with confusion. There is no clarity yet on who will succeed David Cameron. The opposition, the Labor Party is facing the same problem, with the passage of a no confidence motion against its leader, Jeremy Corbyn. There are indications that Great Britain is headed towards a recession.