Tories propose corporate tax break?
It wasn’t just Greens keeping a close eye on our spring conference. Tory candidate for Brighton Pavillion, Charlotte Vere, was regularly tweeting about the event.
This particular one caught my attention:
so I replied:
@AdamRamsay Thanks Adam. Erm, public spending costs money and that is why I am trying to establish where it is coming from.
So I outlined the three reasons that public spending pays for itself – it is generally investments rather than diminishing value capital costs (unless it’s roads), the multiplier effect, and the fact that it’s cheaper to borrow and spend than to allow the economy to be trashed by recession:
Anyway, we went too and fro, with me arguing that Tory job cuts would be more expensive as they would send us into an economic nosedive, and her arguing that:
@AdamRamsay We simply do not have any more money to spend. BTW, they tried that in the 1930s – it didn’t work = Depression.
which I thought was an amusing understanding of, erm, time & chronology.
@AdamRamsay And doubling the annual amount to borrow – credit markets would laugh.
which is amusing given that Mervyn King has now said that Britain’s credit rating is not at risk.
But then she said something I hadn’t heard before. When I said they were going to cut jobs, she said Tories would generate an environment for more jobs. I asked how, she said:
@AdamRamsay Low interest rates, lower corporation tax, cutting red tape, increasing skills availability – good for job creation?
I was astounded. I know Tories are always wanting to cut taxes for big business, but is this really their policy when they are claiming the deficit is the biggest problem we face? Will they really cut taxes for RBS while university courses are being closed?
So, on questioning, she clarified:
@AdamRamsay Conservative policy is there will be corporation tax cuts, partic small co rate to 20%. Corp tax is disincentive to employment
So, that seems to be our answer. The Tories think there is no money. They simply have to cut universities (in whom every person employed multiplies up to an extra 2.5 jobs, according to a study by Edinburgh Uni last year) so that they can give a tax break to their mates at RBS (in whom every person employed only multiplies up to 1.5 extra jobs, according to the same study) and Tesco.
Flabbergasted, two of my Bright Green Scotland colleagues joined in:
And she replied:
Now, there is possibly a tiny extent to which simplification saves bureaucracy, and so a little money, but, a) again, if the Tories can save some money, are they really going to spend it on tax breaks for banks and supermarkets at the same time as they are enacting savage cuts to the vital public services our economy needs? b) If you are going to genuinely raise serious money by ‘simplification of tax reliefs’, surely this means some people getting less relief? In other words, the proposal is to introduce higher taxes for some people who currently get tax relief, and to cut public services so that they can cut taxes for big companies.
I may have got the wrong end of the stick with this. But are the Tories genuinely proposing tax cuts for big business at the same time as swinging cuts in public services? Why haven’t I heard that before?