Let me tell you my experience of large companies investing in a factory overseas. In the small village in France where I come from, a very large company came and opened a factory. They were offered tax breaks by the government and the local authority. I am not aware of the government incentive but know that they were given a free period of five years business rates equivalent by the local authority. Roads were modified and services connection had to be dug in, all this was also paid by the local authority.
When the five years were up, the local authority sent the business rates demand and negotiations started…. You guessed it, 30 years down the line the company has never paid local taxes. As this is probably the largest employer in the area, people are driving miles to come and work there so the number of local people employed is actually limited.
So you will understand why I am a little cynical about Gordon Brown’s announcement about an investment conference next Monday, where the government will bring in 300 companies from overseas that are interested in investing in Britain.
I guess that announcing this makes much better headlines than helping 4.7 Millions SMEs with their business rates or give them employment incentives.
In the same way that publicly beating up bankers for their bonuses makes better headlines than banning the same banks for charging credit cards customers 18.5% interest rates when the Bank of England rate is at 0.5%. Or making the same banks actually help small businesses by ordering them to release funding. After all, it is not like it is actually the bank’s own money or did I miss something?
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