Last week the
G7 advanced economies struck a “historic agreement” on taxing multinationals. As well as setting a minimum corporate tax rate, it was agreed that countries could tax 20 per cent of the profits of the biggest global companies based on where a company makes its sales, provided profit margins exceed 10 per cent.
While this is a promising start,
there is a long way to go before the agreement can be implemented, write economics editor Chris Giles and economics correspondent Delphine Strauss.
Indeed, what the agreement means for the City of London is yet to be seen: one official said the UK was
among the countries hoping “for an exemption on financial services”.
And now, all eyes turn to Cornwall. As
international summits go, the G7 really matters, writes chief foreign affair commentator Gideon Rachman. If successful, the summit could reinvigorate the idea that the West can provide global leadership.
Indeed, US president Joe Biden is using his first overseas trip to
persuade a wary Europe to work more closely with Washington on China. The problem is that while the bloc has become more hawkish on China, it has different economic and strategic priorities from the US.
Biden may, though, take heart from Mario Draghi’s recent move. The
Italian prime minister quietly signed a decree that symbolically ended China’s courtship of the country.
Ahead of the Cornwall summit, there are crunch talks between the UK and EU to consider. Brexit minister, David Frost, began a series of tetchy exchanges this week when he wrote that the
EU needed to revisit the Northern Ireland Protocol.
The
comments were received poorly in Europe and British officials then claimed
Brussels was trying to “exploit” the imminent arrival of Biden in the UK to put pressure on Frost.
Behind the scenes,
officials on both sides are trying to come up with solutions, aware that grace periods on some requirements will expire.
Away from geopolitics, there are signs that relations between
Britain’s financial services sector and the UK government, which have been strained for years, are thawing. The Covid-19 crisis has brought the two sides together.
And elsewhere,
the Bank of England has started stress testing the climate risks facing banks and insurers. The central bank had wanted companies to scrutinise 80 per cent of their counterparties but this was scaled back.
Interestingly, the push for sustainable investing and net-zero pledges is being felt in human resources departments.
There is a war for ESG talent, with demand far outstripping supply, experts warn.
And finally, news of two new female chair appointments.
The English Football Association has hired its first female chair, Debbie Hewitt, while
Rolls-Royce has appointed Anita Frew.
