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Cut corporate welfare not people’s welfare

big businessCorporate welfare has been estimated in a University of York social policy study to cost British taxpayers nearly £85bn a year. That is not far short of the current level of the entire budget deficit which is still £100bn. If industrial-scale corporate tax avoidance were added in to the corporate welfare state, the cost to Britain would comfortably exceed the whole deficit.

So instead of focusing on £25bn (unspecified) further benefit cutbacks and a further huge squeeze on departmental public services bringing their cumulative cutbacks since 2010 to a staggering 40% or more, Osborne might be well advised to look at where money is truly wasted.

Instead of the government scrapping a £347m Crisis Fund which is the last remaining port of call for families on the edge of homelessness or starvation, he might well have cause to wonder whether doubling the public subsidy to £5bn a year for the owners of Britain’s privatised railways can conceivably be justified or whether he should now be ladling out government grants to Jeff Bezos, the billionaire boss of Amazon, which actually exceed the corporation tax he paid last year to Britain.

It speaks volumes that the totals of taxpayers’ subsidies lavished on corporate welfare are not systematically kept anywhere in government and certainly not published even fragmentarily except under duress. Tony Benn insisted that the grants and subsidies paid to the top 100 companies under a range of Acts of Parliament should be published, which Whitehall did everything in its power to block, though eventually he overruled them. However since that unique breakthrough, the figures have been very difficult to come by, and they have to be painstakingly assembled from a large set of different sources. This is a scandal. The public who provide the money are entitled to know how their money is spent.

Even what we do know shows how utterly prejudiced and lop-sided is the political discussion over the budget deficit. It ignores the grants and subsidies paid directly to businesses, amounting to £14bn a year, almost three times the £5bn a year spent on income-based jobseeker’s allowance. Then there are the insurance schemes run by government to protect exporters, the market job for British companies done by the Business Department, the cheap credit made available to banks and other businesses, and the gravy train rolls on. Even that leaves aside the £25bn a year paid in tax credits, housing and council tax benefits to people in work because bad employers refuse to pay them a living wage. Or the colossal public subsidies shelled out to the too-big-to-fail banks to protect the economy from their folly and recklessness. So when is Channel 4 going to put on Corporate Benefits Street and invite on Osborne to defend it?

One Comment

  1. Robert says:

    Sorry repeat my fingers are swollen.

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