Johnson says the UK could use taxes to pay investment outside the European Union

Prime Minister Boris Johnson said leaving the European Union was an opportunity for the United Kingdom to use taxes and subsidies to encourage companies to spend more.

He said in an interview with BBC television that in addition to the regulatory change, “you can use tax and subsidy systems to drive the investment.”

The issue of state aid rules has been a major obstacle to the Brexit negotiations. Under the terms of the deal, either side can impose tariffs on the other if the companies are clearly being unfairly undermined.

The UK is now operating outside the bloc for the first time after the end of the transition period. Johnson has said he wants to use the UK’s new autonomy to boost science and “upgrade” struggling economies in disadvantaged parts of the country.

Many economists predict that more paperwork and barriers to trade will hurt economic growth just as the coronavirus pandemic hurts production.

Johnson said that despite a raft of new rules for trade with the European Union, Brexit remains a boon for exporters. “There is some bureaucracy and we’re trying to remove it,” Johnson said when asked about the routine that took effect on January 1. “We have a tremendous opportunity to expand our horizons, to think globally, and to think big.”

(Adds additional details from the interview.)

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