Big business has welcomed chancellor Alistair Darling’s announcement that he has dropped plans to crack down on corporate tax avoidance and retreated on proposals to tax profits made by British companies abroad.
The Financial Times gloated this week that Darling “has started listening to business concerns”. He certainly has – the forum of executives that helped draft the new tax regime included Julian Heslop, chief financial officer of Glaxo Smith Kline, and Douglas Flint, group finance director of HSBC.
Darling’s U-turn comes after threats that major companies would leave Britain to avoid paying tax. But the same Financial Times admitted that “a wholesale exodus of companies was unlikely over foreign profits”.
On corporate tax avoidance, the government has promised to consult the bosses’ CBI and other business interests.
Britain’s budget deficit is now the widest since records began. According to neoliberal dogma, the government has to cut public spending, raise taxes or both. But with Darling and Gordon Brown desperate to appear “business friendly”, the burden is sure to fall on working people.