If you wanted an Indian entrepreneur to come to the UK, you would not say, we will send the message of anti-immigration, and when you overcome the hurdles of getting here, real and perceived, then in three years we will make it easier? A shop struggling to attract customers in a high street of shops doesn’t increase its prices to attract customers. It doesn’t put up barriers outside for those with the money wanting to shop, and say to its best repeat buyers, we’ll keep on increasing prices for you – it’s not as if you will go elsewhere? It doesn’t have a CEO saying one thing and two MDs saying the opposite to different sections of the customers in the shop.
SP’s right. SP Hinduja that is. Most people won’t say that. They’ll whisper behind SP’s back about some scandals involving Mandelson and Keith Vaz and the like from years ago . But most people will not show the Hindujas the respect they deserve. Remember in the 80s how proud we all felt that an Indian was in the top 10 rich list. How soon we forget what drove us on. Showed us what we could do. I find we are quick to be critical of others who are successful as a way of ourselves deflecting our own failures and inadequacies.
I had tea with SP about a year ago. I was once advised by the son of an Indian member of the British House of Lords and ‘friends’ of SP, ‘don’t get too close to SP, you’ll be tainted’. He gave me a copper bottomed guarantee this would happen. Ironically it turned out the person telling me had a lot to hide himself. Which proves my point.
But, to my main point, SP is right. Britain is not sending out a clear coherent message that it is open for business. I would as PM get on a platform with my Home Secretary, Foreign Secretary and Business Secretary and say, immigration controls will not be permitted to undermine talent and capital coming to the UK. It would be easy for me to say cut taxes. But what then about the budget deficit? Who will pay for the poorest members of society?
The balance has to be that the most economically productive are sufficiently incentivised to maximise their taxable returns, but not over incentivised (ie allowed to keep too much) or under incentivised.
Do you think our domicile rules, our 50% tax rate, our payroll tax rates, our visa rules, our annual Chancellor’s budget (as opposed to a 3-year budget) make overseas investors want to put money here? Or people rush out and hire workers? Of course you can rely on the fact most people won’t leave the UK. But what about encouraging foreigners to come here? No airport capacity and no clear 3 year budget plan about what the tax rates will look like in 2015 would certainly put Indian investors off.
How do you get Indian SMEs to the UK without the poor in UK subsidising it through their higher taxes, so the Indian SME in the UK and its CEO can pay less tax? By spreading the burden over a broader tax base is how. And the way to get a broader tax base is to get more businesses here, and once here exporting and the talent that knows how to do it here. The more persons paying tax, the less we all need to pay.
So you can either keep tax where it is and say you’ll cut it later once the jobs are created and the inward investment comes in. Or you can cut it first, to where you anticipate it will be when you hit your tax base targets. The latter approach is what Government never does. It’s what business would do. It sends a message. It allows planning by everyone. The sooner you paint the picture of the future, the sooner you get to it.
If I want a Britain with 35% top rate of personal tax, 5% employers NI, 15% VAT, 25% corporation tax and a non-domicile rule without penalties – I should do state that is my objective and each year over 3 years will get to it in a stepped process.
It is always easier in politics and in life to do sooner what you will be forced to do later anyway.
Alpesh B Patel