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Budget 2021 Commentary: Brexit

The Chancellor avoids addressing urgent Brexit problems

Alex Altmann, Partner

The Chancellor Rishi Sunak avoids addressing the most urgent issues businesses face on trade with the EU and fails to announce where the Brexit dividends are

“Extending Covid support measures was necessary and is welcomed by the businesses community. However, it is disappointing that the Chancellor has failed to address the most urgent problems businesses are facing on trade with their biggest export market. The mess Brexit has created for businesses has not been mentioned once in the Budget, but it should have been on top of the agenda.”

“We are currently in the midst of a bitter divorce from the EU, which has left large parts of our economy struggling with more red tape, higher compliance costs and less opportunities to trade. If the Chancellor really wanted to help businesses with his Budget, he should have looked at the obvious problems.

“We were expecting a new direction on free trade with the EU and support to overcome the many structural problems the EU trade agreement has created. But where are new opportunities we were promised after Brexit?”

“The ‘spend now, pay your tax later’ approach won’t fix the broken pieces of UK-EU trade. There was no word from the Chancellor on how British businesses can maintain their market access to the EU, which is the biggest export market for many UK companies. It seems the Government has brushed Brexit under the carpet already.

“If our vision is to become a global hub for free trade, we clearly cannot start the journey by increasing Corporation Tax. There are more intelligent ways to reform the corporate tax system, for example by further tackling tax avoidance of tech giants to ensure all corporations pay their fair share of taxes in the UK. But a 6% increase of Corporation Tax makes the UK not more but less attractive to invest in. The EU has become a competitor for attracting global investment and talent, and the Chancellor missed the opportunity to respond.”

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