The Job Creation Hoax

 

'There are a million business opportunities in the world'.

 

It's David Cameron that's anti-business

Campaigners against business abuse believe in wealth creation, not corporate abuse of so-called free markets

• 
• • Richard Murphy for Tax Research UK, part of the Guardian Comment Network
  • guardian.co.uk, Thursday 23 February 2012 13.06 GMT

David Cameron has condemned 'anti-business snobbery'. Photograph: Pool/Reuters

David Cameron will use today's speech to the Business in the Community charity to warn that "we've heard some dangerous rhetoric creep into our national debate that wealth creation is somehow antisocial, that people in business are out for themselves".

Cameron's on dodgy ground here. First, he's flip-flopping, which is amusing to see when Labour has opened a clear lead on this issue. But more important, he's completely missing the point.
The problems that those of us who campaign against business abuse have are that there aren't free markets, and as such wealth creation is not taking place but has been replaced by corporate abuse and that is not socially progressive and has instead proved to be massively socially destructive.

Let me explain. When Cameron refers to business leaders he's invariably talking about the leaders of big business. All, just about without exception, are monopolists or oligopolists. They exploit markets to make excessive profits at cost to consumers. They use those excessive profits to pay themselves vastly inflated sums. That's not wealth creation – that's rent-seeking behaviour that is straightforwardly abusive.

In fact, it's just an act of redistribution, but from the 99% to the 1%. We object to that. We demand information so we can appraise what's going on so it can be stopped. That's one of the reasons for demanding country-by-country reporting – which Cameron and the Tories have been cool about. Cameron has shown himself to be on the side of abuse as a result.

And those big business leaders exploit their position to avoid tax using tax havens. Cameron and the Tories are encouraging that. First they're doing it by passing new legislation that is going to positively encourage large companies (and only large companies, mind: smaller ones are excluded) to set up their treasury functions outside the UK in future and pay just 5.75% tax on them as a result.

Second, while Labour strongly supported country-by-country reporting that would require companies to disclose just what profits they made in tax havens and other countries, and where they do or don't pay their tax, the Tories have gone out of their way to support proposals from big accountants like PWC that do just the opposite because their proposals would ignore all places where no tax was paid – like tax havens. To break monopoly power and rent-seeking behaviour that exploits tax loopholes by exposing it would support wealth creation rather than wealth abuse, but Cameron isn't taking the steps to support that wealth creation. He seems to prefer the continuing secrecy that has supported the abuse.

And there are also aren't free markets because government won't provide the regulation to make sure all businesses comply with regulation or pay their taxes, as I've shown. So there's an unlevel playing field. That's a profoundly anti-business policy on the part of the Tories.

The result is that Cameron's policies encourage shifting of profits to the greedy, the monopolist, the abuser of the consumer, those who ignore regulation and those who are fraudulent. That's not socially progressive. That's socially harmful.

That's why we object to his policies. And whatever the story, while he does not walk the walk, those campaigners like the Tax Justice Network – who believe that being pro-business means being pro-transparency and accountability, being pro-everyone paying their tax and being anti-market abuse measures like tax havens and opacity – will continue to pursue their arguments. Because they're the real pro-wealth creators and real pro-free marketeers, when free means people have the information they need to make proper decisions freely available to them – which is the pre-condition of free markets as anyone who has done some training in economics knows.