Chancellor must steady the ship as Brexit makes for choppy waters

Ahead of the Budget, TheCityUK is calling for the Chancellor to focus on keeping the economy as stable and predictable as possible to offset the ongoing Brexit-related uncertainty. It argues that this will be essential to help business better navigate any economic turbulence that might lie ahead.

In its Budget submission, TheCityUK cautions against significant or unexpected changes to UK fiscal policy – arguing for the focus to be on simplification and predictability. Until the nature of the EU deal becomes clear, the government must take care not to harm UK competitiveness by introducing further complexity in the tax system.

Miles Celic, Chief Executive Officer, TheCityUK, said,

The Budget is undeniably overshadowed by the uncertainty of Brexit. Businesses are already navigating uncertain waters - they don’t need any further choppiness. Any increase to the regulatory and tax burden will only undermine the UK’s competitiveness at a time when it is redefining its position in the global economy and will push additional pressure on to customers.

A simple, streamlined Budget at this time will allow businesses to steer a steady course through Brexit and beyond and remain clearly focused on providing the best possible services to customers and clients. It will also allow businesses, regulators and government to concentrate efforts on the vital task of delivering the best possible Brexit for the UK, the EU and the wider world.

TheCityUK argues that while the UK tax system is generally competitive, when compared to other developed markets it has become increasingly unpredictable and less stable in recent years. The introduction of corporate loss restrictions and increases to the Insurance Premium Tax are examples of unexpected changes which have impacted UK’s global competitiveness. Against the backdrop of Brexit uncertainty, further instability across corporate and personal tax regimes could undermine the UK’s attractiveness to international investors at a critical time.

TheCityUK has also reasserted the need for a smooth and successful Brexit. It cites reducing Brexit-related uncertainty through an urgent and time-bound transitional agreement, and securing the best possible final Brexit deal for the UK and the EU-27 as the most important factors in determining future economic growth and financial stability. It is incumbent on all parties to negotiate and deliver this outcome.

Its submission also stressed the need to achieve a timely and successful transposition of EU law onto the UK’s statute books through the EU Withdrawal Bill currently before Parliament.