Gordon Brown and Labour ministers maintain the UK remains an attractive place for foreign investment as they launch a new “Tax Framework for Business”.
Speaking to an audience of 250 executives and entrepreneurs at the Global Investment Conference this morning, the Prime Minister said: “We know that for Britain a prosperous future must be built not only on sound economics, but investment in the industries of the future, and leadership of the new science and engineering breakthroughs that are today shaping tomorrow’s world.”
Chancellor Alistair Darling then launched a draft document of a new tax framework for multinational companies based on “competitiveness, fairness, simplicity” which promises to consult businesses before making changes to the tax regime.
The document will now act as the basis of a consultation through which a final framework will be developed.
“The UK is a good place to do business and we want to keep it that way,” said Darling.
“Businesses want certainty on tax. That’s is why today I have set out, in collaboration with UK business, the Government’s key principles for tax policy and how we will engage with business when developing tax policy”.
In recent weeks the bosses of drinks maker Diageo, consumerables producer Unilever and pharmaceutical firm Reckitt Benckiser have all raised the possibility of moving operations away from the UK over what they perceive to be an unprofitable business infrastructure in the UK, created by the Treasury.
Speaking earlier this month, Diageo chief Paul Walsh said: “We like operating out of the UK, our heritage is here. But it’s a competitive world and if we continue to see corporate and individual tax increases, we will look at other options.
“We have no plans to relocate at this point in time, but the Government should not take us or any other multinational company for granted.”
Responding to Brown’s speech, Ian McCafferty, chief economic adviser at the Confederation of British Industry, said: “The Prime Minister is right to highlight the attractions of the UK to international investors. The UK has a huge amount to offer.
“We welcome the Government’s recognition of the need to consult on business taxation, which will help avoid unintended consequences that are bad for the economy. It is also right to recognise the value of stability and certainty to business, which allow companies to invest with confidence.”
Defending Government’s track record in enticing foreign companies to the UK, business minister Lord Davies pointed out that there are now more than 75,000 foreign-owned companies in the UK, accounting for approximately 40 per cent of GDP.
Look out for next month’s edition of The Manufacturer magazine in which the president of Europe and Australia of wine producer Constellation talks about the UIK tax regime. To subscribe to The Manufacturer call Claire Woollard on 01603 671300.
