UK Budget: Tax system “rewards wrong kind of business” blast social enterprises
UK social enterprises have blasted the government’s “old fashioned and failed” approach to the economy this week, following the most recent Budget announcement.
It follows a letter sent last week from 130 social enterprise leaders calling on the UK Chancellor to review the tax system to reward rather than hold back businesses doing good.
Peter Holbrook, CEO of Social Enterprise UK, said this week: “Champagne corks will be popping at the prospect of £9bn in tax cuts for business which the government has planned over the next five years. But what are we getting for this? Higher dividends for shareholders and bigger bonus cheques for CEOs?”
He continued: “The Chancellor had an opportunity to back social enterprises which share growth by paying their staff fairly and reinvesting their profits back into their communities. Unfortunately, he decided to rely on old fashioned and failed economic ideas.”
Holbrook said there was “little in the Budget to give people confidence that we are heading towards anything other than simply more of the same”. He said: “If we want to build an economy that truly works for everyone, we need to back a different type of business.”
The letter sent to Chancellor Phillip Hammond called on the Autumn Budget “to begin fixing the UK’s broken economy”.
It said that uncertainty around Brexit “cannot be used as an excuse to do nothing” and claimed the government’s creation of an Industrial Strategy had proved “backward looking and takes a Victorian approach to economic policy making”.
The letter claimed that far too many businesses were “focused on reducing their tax bill, rather than contributing their fair share to fund public services”.
In contrast, more than 100,000 UK social enterprises were contributing over £60bn to the UK economy, employing 2 million people, and “building an economy which works for everyone and which seeks to leave our planet in a better state”.
The letter called for a review of the tax system so that businesses are rewarded for their social and environmental impact. “Social enterprises are using their profits for good, but at the same time are paying more in tax than their counterparts in the private sector,” it said. “For example, the largest co-operatives in the UK pay more in tax than Amazon, Facebook, Apple, Ebay and Starbucks combined.”
“Our tax system is simply not fit for purpose and is holding back growth of a stronger and fairer economy. We are rewarding the wrong kind of business.”