Goodbye to
Tory plans to fire up the economy once we’re finally free
PLANS for a spending splurge and tax cuts to turbocharge the economy if Britain leaves the EU without a deal were hailed as a “Brexit bonus” last night.
The economic blueprint, which has been drawn up under the codename “Project After”, includes a series of aggressive policies to help the UK “steal a march” on the European Union.
The most radical measures include cuts to corporation tax and VAT along with further tax relief to encourage more business investment.
The measures are likely to be introduced in an April budget, shortly after Brexit on March 29.
Such is the seriousness of the economic plan that it is being marshalled by the head of the civil service Mark Sedwill, who has brought in senior figures from the Cabinet Office, the Treasury, the Bank of England and other government departments.
Stimulus
The Department for International Trade began work on the blueprint shortly after the 2016 EU Referendum, but the project has been widened subsequently.
Project After is running alongside another Whitehall plan called Project Bluebell, which is looking at how specific sectors such as agriculture, car manufacturing and pharmaceuticals would be protected if the UK leaves the EU without a deal.
Details of the economic stimulus package, which has remained secret until now, emerged after the Bank of England said this week that while it fears Britain has a one-in-four chance of falling into recession post-Brexit, it expects the UK economy to expand by 1.2 per cent in 2019 – faster than Germany.
Conservative MP Sir John Redwood last night said the plans outlined in Project After represented an opportunity to give the economy the “leg-up” it needs. “This is fantastic, the economy needs a boost. It needs a leg-up as it is sluggish at the moment,” he said.
“A Brexit bonus is just what we need and if we leave without a deal we will have another £39billion to spend in a post-Brexit April budget.
“European economies are slowing dangerously and the US economy is slowing a bit. A spending boost and tax cuts will be the boost we need.”
Chancellor Philip Hammond has previously said that he is prepared to upgrade his spring statement next month into a full Budget and deploy £15billion to help boost the economy. However,
officials have raised concerns that cuts to corporation tax will lead to a rise in borrowing.
Liam Fox, the International Trade Secretary, said: “Our economic fundamentals are very strong, just look at the figures.
“Our exports are at an all-time high. We have recently overtaken Germany as the biggest exporter to Hong Kong. This is an economy that is in robust health.”
The Daily Express exclusively revealed last year that corporation tax would be halved and millions would see their income tax slashed under the move to attract new investment to the UK if there is a no-deal Brexit.
Disruption
A Cabinet source had said that tax cuts were being discussed as preparations for a no-deal were stepped up in October.
“We could halve corporation tax and slash personal income tax,” the source said.
Home Secretary Sajid Javid has already said Britain’s £39billion EU divorce bill should be spent on tax cuts if there is no deal.
And former Brexit Secretary Dominic Raab has spoken openly about slashing corporation tax in the event of a no-deal.
He said the business levy could be reduced to 10 per cent “to pull every lever we have got to see us through what short-term buffeting or disruption we have”.
Corporation tax is currently 19 per cent and is due to fall to 18 per cent in April 2020.