Today the chancellor made it quite clear, for anyone still unsure, that we are not ‘all in this together’ as he announced even bigger tax breaks for business than already planned.
Sally Hunt is the general secretary of the University and College Union (UCU)
Today the chancellor made it quite clear, for anyone still unsure, that we are not ‘all in this together’ as he announced even bigger tax breaks for business than already planned. In one of his first speeches as chancellor, George Osborne promised to slash corporation tax – at a time when Ireland was suggesting that an economy built on low corporation tax was not perhaps the soundest foundation.
Back then he promised to cut the tax from 28 to 27%, which would have made it the lowest in the G7. Today he has gone even further and slashed it to 26%, and promised annual cuts of 1% for the next three years.
Each one percentage point cut in corporation tax costs the exchequer £800 million and the chancellor’s move will deprive the treasury of £11.2 billion over the next four years. People will no doubt have strong views on how that money could be spent.
The University and College Union has been arguing that instead of saddling students with thousands of pounds of debt, we should look at finally ensuring that big business pays its way for all the benefits it receives from our higher education system.
A modest increase in corporation tax, just to bring us in line with the G7 average, would generate considerable money that could be ringfenced for our universities. However, the chancellor has decided to give big business tax cuts and saddle future generations with record sums of debt.
Under our proposals only the companies earning the biggest profits would be affected, which means it would be the likes of Tesco, the banks and KPMG who are paying, not small businesses. Critics may argue that our plans are more ideological than practical but an increase in business tax is a much more efficient way to collect revenue than tuition fees.
Furthermore, the money could be collected almost immediately – unlike fees where the money will be collected years after students graduate; a policy that seems at odds with government’s number one priority of spending as little as possible at present. Even Tory Mayor Boris Johnson appears to like our approach and has made a similar proposal in order to fund Crossrail in London, charging businesses 2p in the pound to support a project which they will benefit from in the long-term.
Elsewhere in today’s budget, the government tried to make much of the £100m extra for science. That money will be shared between four research centres, all of which are in Tory constituencies, and comes as total science budget capital spending will fall by £356m from £873m in 2010/11 to £517m in 2014/15 – a 41% cash cut.
So, given the huge overall cut to the science capital budget, £100m to be shared between four research centres is to be welcomed, but is hardly cause for celebration.
The four research centres and their constituencies and MPs:
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The Babraham Research Campus in Cambridge (Andrew Lansley MP, South Cambridgeshire);
The Norwich Research Park for environmental and life sciences (Richard Bacon MP, South Norfolk);
International Space Innovation Centre at Harwell (Edward Vaizey MP, Wantage);
The National Science and Innovation Campus at Daresbury (Graham Evans MP, Weaver Vale – majority of just 991).