What a felicitous endorsement. Chancellor of the Exchequer George Osborne had no sooner erected his “Open for Business” sign than in stepped his first customer: none other than Sir Martin Sorrell, chief executive of the world’s largest marketing services company, WPP. Where Sir Martin treads, other multinationals will follow in droves – or so Osborne piously hopes. It’s the crystal in the copper sulphate solution, the grit in the oyster – the first serious step towards reflating the economy, just in time for the next General Election in 4 years’ time.
So why has Sir Martin become one of George’s best buddies, exactly? Corporation tax: the salivating prospect of paying a lot less of it. In political circles, it’s a matter of some national embarrassment that one of Britain’s biggest and most successful companies isn’t British at all, any more. Since 2008 it’s been Irish. And all because Dublin has been warm and inviting, with the most enticing corporate tax regime in Europe; while Britain’s had become one of the most hostile, with increasingly uncompetitive tax rates and, more ominously, a piratical approach to profits earned outside our territorial waters.
But no longer. Thanks to the Budget, all that onerous tax is a thing of the past. Rates will come down by 5% in 4 years to 23%, making Britain once more the cheapest place to do business in Europe. And Osborne has simultaneously promised to reform those punitive overseas levies as well. A cagey Sir Martin says he’ll wait to see the legislation enacted, but we can be pretty certain – judging from his chipper performance on the Today programme this morning – that it’s all over bar the WPP board meeting plus assent from its shareholders.
And, frankly, that’s a formality. Ireland’s once unbeatable welcome pack now looks a will o’ the wisp. Corporate tax rates will soon soar – a quid pro quo to the European Central Bank’s bail-out of its economy (which in any case looks poleaxed for years to come). The fair-weather corporate friends can’t wait to get out: it’s not just WPP; media company UBM is also packing its bags. Besides, all those flights, just to attend a meeting over the water…the tedium, the expense.
Don’t tell George, though. He thinks Martin’s doing him a big favour. It must be worth a peerage at some point. Or, at very least, the Conservative Party advertising account. Services to British industry, and all that.