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Theresa May leverages UK tax haven threat in Brexit speech

Theresa May

Prime Minister Theresa May has threatened to transform the UK into a tax haven if the European Union negotiates a bad deal for Brexit, as she confirms the country will leave the single market.

In a speech at midday, May outlined 12 objectives for a Brexit deal, including that the UK would not remain a member of the Customs Markets Union, but would negotiate the elements of it that benefit the UK.

May concluded her speech with a warning shot to the EU arguing that a bad deal for the UK would be an act of “calamitous self harm” and “not the act of a friend”.

She also hinted that she would be willing to embrace highly favourable tax policies to lure business from Europe.

“No deal for Britain is better than a bad deal for Britain,” she warned. “We would have the freedom to set the competitive tax rates and embrace the polices that would attract the world’s best companies and biggest investors to Britain. If we were excluded from the Single Market we would be free to change the basis for the UK’s economic model.”

Parliament would get a chance to vote on the deal and the UK would seek a phased implementation period, May confirmed.

May adds that the negotiations will be driven by four key principles.

“We will provide as much certainty and clarity as we can at every stage. And we will take this opportunity to make Britain stronger, to make Britain fairer, and to build a more global Britain too,” May says.

The pound rose 1.74 per cent at $1.2251.

Investor fallout

DeVere Group chief executive Nigel Green says May’s speech, combined with today’s sharp rise in inflation, mean investors should invest more internationally and added that the confirmation of a so-called “hard Brexit” signal several years of uncertainty ahead.

“The markets detest uncertainty. As such, investors should take precautions against a potential fall in the value of UK assets and avoid firms dependent upon UK-only earnings.

“Investors can achieve this by increasing exposure to non-UK investments, such as international stocks, bonds and property.”

May said it was in the UK’s best interests for the EU to remain together, in contrast to comments US president-elect Donald Trump made earlier this week.

Regarding immigration, May said the UK would regain control of its borders by leaving the Single Market, but that it would seek to attract the “best and brightest” from the European Union following its exit.

May said that the UK would continue to build on its strength in science and innovation through collaborations with EU universities and highlighted areas such as clean technologies, medical developments and space travel as areas that would benefit from continuing this relationship.

May’s 12 objectives for Brexit:

  • We will provide certainty wherever we can.
  • Leaving the European Union will mean that our laws will be made in Westminster, Edinburgh, Cardiff and Belfast.
  • A stronger Britain demands that we strengthen the precious union between the four nations of the United Kingdom.
  • We will deliver a practical solution that allows the maintenance of the Common Travel Area with the Republic of Ireland.
  • Brexit must mean control of the number of people who come to Britain from Europe.
  • We want to guarantee rights of EU citizens living in Britain & rights of British nationals in other member states, as early as we can.
  • Not only will the government protect the rights of workers set out in European legislation, we will build on them.
  • We will pursue a bold and ambitious Free Trade Agreement with the European Union.
  • It is time for Britain to get out into the world and rediscover its role as a great, global, trading nation.
  • We will welcome agreement to continue to collaborate with our European partners on major science, research and technology initiatives.
  • We will continue to work closely with our European allies in foreign and defence policy even as we leave the EU itself.
  • We believe a phased process of implementation will be in the interests of Britain, the EU institutions and member states.

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Comments

There are 19 comments at the moment, we would love to hear your opinion too.

  1. FIRST CLASS & SENSIBLE SPEECH. I had been reserving judgement but provided she keeps to her objectives, all will be fine for the UK & my grandchildren

    • I guess you haven’t looked at our trade deficit or our budget deficits, or household debt levels. Or demographics? Or considered what will happen when the interest cycle turns up? I guess you are bullish, the default position of those that sell mainstream investments. Your grandchildren will thank you during the civil war that lies ahead, you won’t see it, so don’t worry.

  2. Good to see some good leadership from Theresa May in relation to Brexit negotiations. So glad Cameron had a sulk and resigned and left us with a leader who actually believes in Britain.

  3. The EU politicians will not be interested at all in anything May has to say. They are interested in strengthening the EU and will use Brexit as an opportunity to that end. That means the interests of the EU are served by weakening the UK. In retaliation May threatens them with lower taxes. They are threats, and the EU will come back at her with some shockers. She talks about the importance of one union of countries, the UK, and then the importance of leaving another union of countries, the EU. My guess is that the EU will make an irresistible offer to the Scots, and that will win the Scots the independence from the UK, a union where they have no veto. Instead they will be in a union with a veto and we saw recently how this power can be wielded when Wallonia got Belgium to veto a trade deal with Canada.

    • Ken, Edinburgh has been called ‘the Athens of the North’ – the EU doesn’t want another Greece! Seriously, and you made this point yourself, Spain will not agree to Scotland joining the EU because of its own issues with Catalonia so if one country veto’s it …… I am proud to be both British and English and I am proud of what our islands have achieved over the years which would have been impossible without the unique combination of all four nations. I know, from talking to family across the border rather than relying on mainstream media, that this same feeling is widespread which may be why the SNP has gone a bit quiet over holding another referendum. The Scots are not daft and they have seen how their country has been run over the last decade – there is considerable distrust regarding the SNP’s handling of affairs north of the border.

      • UK Plc is and always has been a maritime trading nation and is the centre of the known universe. The EU has no choice but to deal fairly as they need us more than we need them – after all, who else is going to bail them out them when they decide to fight each other.

  4. I’ve news for Mr Green – over 70% of the earnings of FTSE 100 companies come from overseas. Encouraging people to invest overseas at a time when our currency is weak and therefore buys less units/shares is not something I’ll be doing.

  5. Actually, the EU isn’t a free trade area at all, it’s a customs union. A free trade area is a common market, within which goods, services, capital and sometimes labour can circulate without hindrance. It was what we thought we were joining but we were lied to, and what we now want. Examples are NAFTA in North America, EFTA in Europe and ASEAN in South East Asia.

    A customs union such as the EU, by contrast, surrounds itself with a common external tariff, and conducts all trade talks on behalf of its member nations. It is a we are in effect protectionist common position and as such every continent on the planet is now experiencing economic growth except Europe. The EU is bad for the third world and for Europe itself. It commoditises cheap labour, suppresses wages and robs member states of skill and workforces badly needed at home, so much so the Corbynistas remoaners represent a corruptions of socialist values.

    if UK-EU trade reverted to World Trade Organisation tariff barriers, EU exporters would be liable to pay £12.9 billion a year on goods sold to Britain. That is more than twice the £5.2 billion in tariff costs that the UK would face on EU bound exports. Sounds like a plan to me!

  6. @ Simon
    “corruption of socialist values”. Perfectly put.
    I’ve never understood why there was/is such strong left wing/liberal support for such a protectionist club; why support even the existence (let alone membership) of an entity that in global terms excludes poorer countries from one of the wealthiest markets, in favour of preserving the wealth of already (relatively)rich nations?
    For example, if what I read was correct, Germany makes more money from Tanzanian coffee resources than Tanzania does. Its shameful actually.
    How often are we told that “leaving will be bad for our economy” yet those that say it seem to then conveniently ignore all those really poor countries who aren’t and cant be members.
    Im glad we now appear to be championing global free trade and I hope we stick to it, even when its not in our selfish short term interests.
    And if we cant have free trade worldwide, then a truly compassionate world ought to perhaps be offering tariffs that favour rather than hamper poor countries, in a bid to relentlessly diminish true poverty.
    And perhaps even those who don’t see things so altruistically could be swayed by the fact that it would surely be to everyone’s benefit in the long term to increase overall worldwide wealth, even if you ignore the obvious humanitarian benefits.

    • ‘And if we cant have free trade worldwide, then a truly compassionate world ought to perhaps be offering tariffs that favour rather than hamper poor countries, in a bid to relentlessly diminish true poverty.’

      Suicide is painless you think? Export all of our jobs to China AND give them positive tariffs too?
      Why don’t we just invite the Chinese into all of our homes rent free? Surely that’s the *nice* thing to do. There’s a reason we became a great nation: we’re better. We’re no longer great because we became lazy and greedy, and our politicians sold us out to the globalists decades ago. Yet you want more of it. How odd.

  7. It will be alright in the end, and if it is not alright, it is not the end.

  8. I think EU politicians will have enough to worry about on their own doorsteps, with France, Germany, Italy and others all having elections this year and worries about the popularist vote, rather than the UK…….

  9. Paul perhaps the reason the left wing like the EU is because it’s views are generally more socialist than those of the UK. I know there’s a corruption of those values but have a look at those running the European Commission to understand why this is the case. Democracy to them is fine, as long as the public votes the ‘proper’ way, i.e. the way the Commission REQUIRES them to vote. Too this end they have held multiple referendums until that ‘correct’ vote is delivered.
    More generally Theresa May’s speech was excellent and laid out things as they are, but I wish the media would refrain from hyping up her comments to the level of ‘threats’. It is the Europeans who opened that front saying, in a fit of pique, that they were going to punish the UK and make it as hard and costly for us to leave as they could. Basically they are very worried that more ‘defections’ could be in the offing and they want to come down hard on the UK to dissuade others. Mrs May was merely making comment on the negotiating position Jean Claude Junker and Michel Barnier (?) have already laid out. A little disappointing that the EU have already excluded the UK from normal discussions before being notified that we intend to leave. Double standards if ever I saw them as they are telling us that we cannot negotiate trade deals before we have actually left the EU, which will be in a minimum of two years from now but they can treat us as if we have left already.

  10. ……….I am not an expert on the EU (is anyone??) and what may lay ahead for the UK (or the rest of the EU for that matter after 2017 has passed) – but I will say I very much enjoy reading all of your comments and the sharing of your views/knowledge on this very complicated subject.

  11. Mrs May, please cancel the LISA before it is too late. YOu Govt has spent Millions on ‘Workie’ promoting AE and yet then send out a ‘Savings leaflet’ that totally ignore Pensions and worse yet, does mention ‘Premium Bonds’ gambling as a way of saving, have they not heard of inflation and the fact that NOT everybody wins a prize.

    So, back to the good old LISA

    LISA. Pension

    £4,000 taxed money pa plus 25% Govt £40,000 pa plus 25%, 66.67% or 81.81% tax relief from Govt
    Contribution access – 18 – 40yrs Birth – 75 yrs
    Govt contribution Age limit – 50yrs. 75yrs
    Use – first Home before age 60 Anything after age 55
    Access to money – 60 tax free (contr taxed already). 55 – 25% tax free, under personal Allowance tax free, balance at marginal rate
    IHT – included. Excluded
    Growth – Tax Free. Tax Free
    Who – one each. One each
    which one would you rather have? Now re-issue the savings leaflet with some honesty.
    Commercial Companies can no longer afford DB / Final Salary Scheme pensions and have closed them to new members and converted them to DC plans. What makes you think that the British Govt can still afford them via a ‘Ponzi’ scheme?
    Answers on a POST CARD – ted.shaw@ejfinancial.co.uk

  12. Is it not odd that the DeVere expert suggests bonds amongst other things, just at the point where they are likely to start sliding and potentially crash…

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