Danny Alexander went to the heart of New York’s financial district yesterday in a bid to lure more American companies to Britain with a promise of lower corporation tax and access to European Union markets that he said hugely benefit both the US and UK economies.
The Chief Secretary to the Treasury told an audience at Bloomberg’s headquarters in Manhattan that “there has never been a better time to invest in the United Kingdom” for any American company looking to expand, or set up European headquarters or new research and development centres. He cited the UK’s lower corporation tax rate of 21 per cent, which he said would fall to 20 per cent next April to give Britain “the lowest business tax of any major economy”.
Mr Alexander said: “If you invest in the UK, you are investing in a country whose tax system supports business.” He also stressed that research and development tax credits are available for US firms in the UK and “tax reliefs for film and TV... and computer games and animation.”
A growing number of American firms are considering moving their tax domicile abroad, and the UK has become increasingly more attractive. This is seen as a potential source of tension between Westminster and Washington but Mr Alexander responded by saying “It’s not just about tax”, and he praised the overall business environment the UK government is seeking to create.
Mr Alexander acknowledged growing anti-EU sentiment in “some corners of the European community”. But he added: “I have always been absolutely clear that rather than talking about the UK leaving the EU, the UK should be leading the EU, and ensuring it works in a better way for businesses and for people.”
He cited the Transatlantic Trade and Investment Partnership currently under discussion between the EU and the US, which he said could have a “fantastic impact on your exports and our exports”.
Mr Alexander said an independent report published this month estimated this EU-US partnership could increase British exports by 2.9 per cent and American exports by 7.4 per cent. “It also suggested it could add $125bn [£73.5bn] to the US economy and create 750,000 jobs... with similarly huge potential benefits to Europe,” he said.
On the Scottish referendum, Mr Alexander said that, while was confident his native Scotland would remain part of the UK, “we have a lot of work to do” before 18 September because “there are quite a lot of undecided people”.