So the Tory faithful gather in Manchester this week. In the light of recent developments and events they have a golden opportunity to pull a few levers, press a button or two and show the UK Business Community that they “get it”.
For it is only Business that ultimately creates jobs and generates taxation. When Business makes a profit, it can only do one of three things with it: reward the shareholders who took the risk by way of dividend or capital gain … and they’ll pay tax on it. Or, keep it in the business as retained profit … and they’ll pay tax on it. Or employ people and pay them (bonuses an’ all) … and they’ll pay tax on it! That tax goes in part to pay good hard-working people in the public sector (the nurses, the teachers, the doctors, the prison officers, the policemen, the soldiers) and they’ll pay tax on it. But if it wasn’t for the wealth that Business generates, there would be no tax in this Country of ours. There would be no employment, no schools, no hospitals, no trains, no roads, no airports. I don’t think most trades unionists, environmentalists, educationalists, politicians and (dare I say it?) journalists get that fact and if they do, they treat it like an inconvenient truth, to be ignored as much as possible.
Here we are, in dire need of the private sector to come to the rescue of the UK Economy and last week we see the man who wishes to be the next Prime Minister playing to the Union gallery and the anti-business party activists by administering a kick in the teeth to the businesses of the Country. Of course there are good and bad businesses, but then there are good and bad policemen, good and bad teachers, good and bad doctors (and good and bad politicians!). So Ed Miliband chooses to wage war on business, describing a business ethic that 99% of risk-taking business women and men across the land just wouldn’t recognise. People who put their houses, their reputations, their livelihoods on the line every day and employ people and create wealth to generate tax … it ain’t rocket science! He will say he didn’t mean all the good ones; but he sets a mood music, a tone. He creates a feeling that smacking business is OK because they’re all at it aren’t they?! He didn’t praise the good ones did he?! As the last Labour Chancellor asked after Miliband’s electoral suicide note – what constitutes a bad business? Is risking your money to redevelop an inner city, create a better environment and many jobs, but making a lot of money along the way by exploiting an opportunity in a deprived area good business or bad business? Presumably Mr Miliband will let us know. I won’t be holding my breath in anticipation.
Then there’s dear old professorial Dr Cable. A Business Secretary that clearly holds his nose every time he has to mention wealth creation or discuss the profit motive. So there’s to be a Mansion Tax is there Vince? Just like an appallingly bad business (paying below the National Minimum Wage, ripping off consumers) it is easy to identify those owners of “Mansions” that wouldn’t miss a few million in tax as they buy yet another house in Kensington. But what do you do Vince about the hard-working, mortgaged-to-the-hilt couple living in that different country called the South-east, commuting to the City every day (probably reading these words on the crowded train), working every hour and living in a house that would be caught by this tax on so-called wealth but who could not in any way afford to pay it. And if Vince intends to wait and collect it on death could someone please explain quite how a payment into the coffers in 2050 will sort the deficit now? And if it’s not the big houses he attacks it’s the big banks. Those enormous generators of tax revenue for UK plc. “Smack a Banker” may be a favourite Libdem Conference Party Game, but can Vince please tell me what he intends to do for jobs and tax when they’ve all left town?
So George, it’s your turn. What’s it to be? Faced with a Eurozone marching valiantly towards 1970, with a new word taking shape to describe a weak, indecisive, vacillating, democratically-elected primus-inter-pares … I give you The Euro Leader! Speciality: kicking the can down the road in the vain hope something will turn, hopefully in the shape of the German voters who will allow their taxes to be used to allow a Greek train driver to carry on retiring at 55. Turkeys, voting and yuletide come to mind. Faced with calls to adopt a Plan B (that evidently means spending £12 billion we haven’t got on cutting VAT to help the makers of those imported consumer goods we buy in our High Streets). Faced with the seeming inability of the private sector to come to the aid of the Nation with job-creation and profit making.
Three things you could do, George, at a stroke. No need to wait for a Budget or a bad set of Local Election results. Do them and Business stands a chance of doing its bit to help Old Blighty:
1. Abolish National Insurance Contributions for employers. This is a tax on jobs, pure and simple. No other tax in the Country is levied when you have made no money at all, just employed someone. At a time of high unemployment, how crazy is that?! Plug the resulting revenue hole with an increase in Corporation tax; at least let Business pay its fair share out of money it earns not just the jobs it creates.
2. Insist on an immediate shift in the UK Government Rules (note: not the EU Rules … they’re quite helpful if only we played it like the French and the Germans) on Procurement so that it is Best Value and not Best Price that matters. Take into account the retention of skilled labour in a local community, the emblematic effect on a school of keeping an innovative, value-added manufacturer down the road, of building a competitive, productive base for future export and suddenly we’re buying our trains with our taxes from Derby not Dusseldorf.
3. Remove every recipient on the National Minimum Wage (which went up again on 1st October; very helpful that (not!) at a time of trying to get UK Business to take on people at a cost it can afford) from income tax. Hypothecate the tax raised from the 50% payers to pay for it. That would stop the appeals to reduce the top rate (an honourable contribution to the low paid keeping more of their low income) and put more disposable income in the hands of (mainly) young people, who would then go out and spend it … and create another job down the road; again, it ain’t rocket science! Also, smaller businesses would hopefully employ another person on the NMW safe in the knowledge the recipient’s take-home pay is greater.
There we are Chancellor. You have a great chance to get behind UK Business this week; to show a distinction between your Party and the others. Or you can miss your opportunity … and be just like the rest; showing by your actions (or, rather, inactions) not words that you too believe wealth (and tax) just grows on trees.