Jacob Rees-Mogg is the face of a new Adam Smith Institute campaign against a global minimum corporation tax, which threatens to undermine levelling up. As Chancellor, Rishi Sunak spearheaded the international campaign for a global minimum corporation tax of 15%, set to come into force this year. And he claims he’s a Thatcherite…

A new report from the ASI published today, however, finds that the policy threatens the very levelling up agenda the current government were elected on; undermining key areas of UK tax policy including investment zones, free ports, business tax credits and the super-deduction policy the Prime Minister so keenly championed. Rees-Mogg adds that the policy will also level down the wider global economy…

“Tax competition between countries keeps rates low and increases prosperity. Agreeing high rates among a cabal of developed nations will keep the world poorer.” 

The report points out the ideological inconsistency of a government that champions taking Britain out of the EU, only to then sign away our financial independence via a new OECD treaty. It particularly threatens investment zones and freeports – the latter being one of the only policies Rishi Sunak can point to as proof of his pro-Brexit credentials…

“because the Pillar Two rules permit a carve-out from included income equal to 5% of eligible payroll costs—including payroll taxes paid by the employer—the interaction of the new tax rules with investment zone incentives could perversely result in higher top-up tax liability owing to lower payroll costs in the zones. This would tend to disincentivize investment and employment in investment zones and freeports.”

Just another day of a Conservative government forgetting what Conservatism means…

Read the report in full here.