RUTH SUNDERLAND: UK should win race to take a position

Looking for funding: Jeremy Hunt

There isn’t any secret, actually to not Jeremy Hunt, that we’d like companies to take a position extra in Britain.

Minds in authorities had been centered on this by some frank remarks by Pascal Soriot, the boss of medication big AstraZeneca, on his determination to arrange a brand new manufacturing plant in Ireland reasonably than the UK.

Soriot has basked in company famous person standing since he noticed off a cynical hostile takeover bid by Pfizer of the US virtually a decade in the past. Had he taken the grasping approach out, the UK would have misplaced a flagship asset and the world would in all probability have been disadvantaged of a Covid vaccine.

So when Soriot mentioned the UK’s hopes of changing into a superpower in life sciences are being damage by our tax system, Hunt would have been horribly stung.

The Chancellor has singled out life sciences as an space during which he believes the UK can excel, together with inexperienced industries, digital know-how, the inventive sector and superior manufacturing. 

Hence the mountain of rhetoric within the Autumn Statement about supporting enterprise, larded with claims his ‘full-expensing’ measure is equal to an £11billion tax break, plus the boast that the UK has the bottom company tax within the G7.

True, however Ireland shouldn’t be within the G7. It is a brief hop away, with a headline company tax price of 12.5 per cent, in contrast with 25 per cent within the UK after a hike Hunt selected to not reverse.

At least, although, he gave his backing to a overview by Tory peer Lord Harrington into attracting extra international funding. The most eye-catching of Harrington’s proposals is a concierge service, the place potential international traders are supplied with a Jeeves-style fixer, who can steer them by way of the cats’-cradle of grants, planning guidelines and the like.

One potential issue is discovering the fixers within the first place. Previous makes an attempt to rent lately retired senior civil servants have apparently fallen foul of Whitehall drives to cut back using exterior ‘consultants’, which seems like classic Sir Humphrey.

The actual take a look at is whether or not the Government and the Civil Service will put actual welly into making all of it occur. Britain is definitely in an excellent place on international direct funding, with the best inventory in Europe and inflows of practically £80billion final yr.

But enterprise funding general, together with by UK corporations, is persistently decrease than our peer group. We depend on foreigners to fill the hole. We can not relaxation on our laurels. Not when Joe Biden is touting his ludicrously named Inflation Reduction Act, which is providing as much as $2 trillion in subsidies to corporations from all over the world. In the race for funding, there are not any prizes for coming second.

The method to reply is to not attempt to decide winners or to bathe rich abroad corporations with taxpayer-funded subsidies for investments they could properly have made anyway. The UK is sweet at attracting abroad consumers however not so intelligent at removing the predators who’re merely masquerading as traders and actually need to truffle out low-cost property.

Genuine long-term international traders do exist, corresponding to Nissan, which has simply introduced a £2billion plan to construct three electrical vehicles in Sunderland.

Many in my native North East wouldn’t thank me for saying so, however that is the fruit of a decided drive by Mrs Thatcher within the Nineteen Eighties to draw Japanese automotive makers.

In related vein, there must be ‘goal lists’ of abroad corporations to pursue in every of the Chancellor’s 5 progress areas.

The outdated notion of leaving all of it to the free market to kind out, generally related to Thatcherism, won’t work.

Maggie herself couldn’t have been a extra energetic saleswoman for Britain.