Stefan Loefven, the Swedish Prime Minister, said that any “aggressive” tax cuts by Britain will damage relations with the European Union, reports The Telegraph.
It comes as Philip Hammond, the Chancellor, prepares to “reset” Britain’s fiscal policy in his Autumn Statement by cutting taxes and borrowing to invest in infrastructure.
Mr Loefven said that Brexit “shouldn’t take longer than necessary” but also suggested that Mrs May is entitled to wait until beginning the formal process of exiting the European Union.
He told Bloomberg: “If the UK wants some time to think about the situation, this will also give EU countries some time.
“On the other hand, you hear about plans in the UK to, for example, lower corporate taxes considerably. If they, during this time, begin that kind of race, that will of course make discussions more difficult.”
Mr Loefven added: “We will continue to invest, because that’s the future,” Loefven said.
“Tax cuts are not the future. We need to continue to invest, and, for example, make sure our children get a good education.”
Politicians have previously been urged to use Brexit as a chance to “reboot Britain”, scrapping corporation tax in an effort to reignite the economy.
Madsen Pirie, president of the Adam Smith Institute, said that leaving the European Union provided “a unique chance of the sort that occurs perhaps once in a generation”.
He identified tax as one area where policy has evolved “from accidents and incidents rather than from design” and proposed sweeping reforms, including the elimination of corporation tax.
He said: “There is a false belief that this is paid by companies, but it is not. It is paid by the employees of companies, by their customers, and by their shareholders.”
Mr Pirie argued that the tax could be reduced in stages, to 12.5pc, then 6.25pc, and then zero.
