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Sajid Javid urges Brexit borrowing increase and tax cuts

Published 06/07/2016

Business Secretary Sajid Javid supported Stephen Crabb in the Tory leadership election
Business Secretary Sajid Javid supported Stephen Crabb in the Tory leadership election

Sajid Javid has called for an increase in borrowing, tax cuts and swift decision making to ensure stability and protect growth as Britain leaves the EU.

The Business Secretary said bold reforms and decisions were needed from the Brexit government and suggested existing spending targets should be scrapped.

Instead the Autumn Statement should include a raft of sweeteners for foreign investment including tax relief for companies and individuals, the MP said.

Mr Javid laid out his vision in an article in the Daily Telegraph after suffering a setback in his aspirations to succeed George Osborne as Chancellor.

He had backed Stephen Crabb's bid for the Tory leadership with the hope of a transfer to the Treasury on their "blue collar ticket", but the Work and Pensions Secretary retired from the race on Tuesday.

Mr Javid said whoever the future chancellor may be they should step back from existing Budget commitments, including the timetable for reaching a surplus.

He proposed borrowing billions to fund a wave of infrastructure projects and backed the building of a third runway at Heathrow.

"With negative long-term real UK gilt yields, borrowing has never been cheaper, so we should create a Growing Britain Fund worth up to £100 billion to fund business friendly infrastructure programmes alongside the private sector," he wrote.

Businesses could be encouraged to stay in - or lured to - Britain by a cut in corporation tax from 20% to 15%, the lowest of any major economy.

Some higher earners would also see their taxes reduced while there would be an immediate £1,000 increase in the personal allowance for workers.

He wrote: "This would mean stepping back from the targets set in the last Budget, and taking a little longer to achieve a budget surplus. Yes, we still need to be careful with every penny of public money, but no serious leader sticks to outdated plans once the underlying facts change."

The severing of ties with Brussels will allow a £10 billion reduction of red tape backed up by a freeze on new business regulation, Mr Javid said.

He had advocated Britain staying within the EU as part of the Remain campaign, whose focus was heavily on the dangers of leaving the single market.

However there are benefits to be had despite the risks, Mr Javid said.

"They haven't gone away. We must move quickly to mitigate them, ensuring short-term volatility doesn't turn into long-term decline. But Brexit also brings opportunities," he wrote.

Mr Javid said negotiating trade deals with important markets including the US, Canada, Japan, China and India must begin immediately.

He also called for a decision on the status of EU nationals living in Britain to be made quickly and advocated the right for legal workers to remain.

Mr Javid said control over Britain's immigration policy and sovereignty of Parliament had to be red lines, with a comprehensive free trade deal arranged with Europe within them.

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