Editorial: Beware our drift into a high-tax economy
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Over the past few years, Emmanuel Macron and other French leaders have gone to great lengths to tempt international businesses across the channel onto French soil.
This has verged from the sublime (investment dinners at Versailles) to the ridiculous (adverts from ‘The Normandy Times’ in British papers looking for ‘hot entrepreneurs… allergic to post-Brexit tariffs). In the City at least, little of this has worked; our competition remains New York and Singapore, not Paris.
So it is no doubt with some relief that Emmanuel Macron can wake up today and discover that we are set to make his arguments rather simpler. If the UK always had one thing going for it, it’s that we always rewarded hard work and success more than our Gallic cousins. That may not last.
The research reported on at the bottom of this page suggests that it won’t be long until the UK’s tax competitiveness falls behind that of France. Growing, innovative economies like Estonia and Latvia lead the way in Europe – the Netherlands will be more than a dozen spots in front.
Post-Brexit, the chattering classes warned the Tories wanted to turn Britain into Singapore-on-Thames. At this rate it’s more like Madrid-on-the-Medway. We must be more ambitious.
It is unlikely, alas, that the direction of travel will change much in next week’s budget. The bank surcharge being slashed to three per cent is a sign of some progress, but victory will simply be Rishi Sunak reining in his colleagues’ spendthrift ways.
The Chancellor should remember, then, the cautionary tale of the complacent frog. Plunged into a pan of boiling water, it will surely jump out. But gently boil water with the frog already in the pan, and it will sit there as the temperature rises, nonplussed to its impending doom, until it offers its final, too-late, despairing ‘ribbit’.
We must beware our gentle drift into a high-tax economy.
Read more: Editorial: What the City can learn from Succession… and what it shouldn’t