These new figures do need to be taken with a pinch of salt, of course. But even so there does arise the possibility of an interesting deal:
Kevin Farnsworth, a senior lecturer in social policy at the University of York, has spent the best part of a decade studying corporate welfare – delving through Whitehall spreadsheets and others, and poring over Companies House filings. He’s just produced what is, as far as I know, the first ever comprehensive audit of the British corporate welfare state.
The figures, to be published in a forthcoming report, are astonishing. Farnsworth takes the financial year 2011-12 and tots up the subsidies and grants paid directly to businesses. They amount to over £14bn – that is, almost three times the £5bn paid out that year in income-based jobseeker’s allowance.
Add to that the corporate tax benefits, the value of the cheap credit made available to banks and other business, the insurance schemes run by the government to protect exporters, the marketing for British business laid on by Vince Cable’s ministry, the public procurement from the private sector … Farnsworth calculates that direct corporate welfare costs British taxpayers just shy of £85bn a year.
No, let's not try to pry into the accuracy of those numbers for a moment. Let us, for the sake of argument, take them to be true. And let us add one more piece of data. Corporation tax revenues run around £40 billion a year or so. So, if we are to believe these new figures it would appear that we've the possibility of a very promising agreement here. From our side the simple abolishment of corporation tax and also the abolishment of all that corporate welfare sounds like a great idea. And clearly those who believe that number for corporate welfare should also leap at such a deal. The Exchequer would be, by those numbers, near £40 billion a year better off.
The only problem with this deal is that those who claim to believe those corporate welfare numbers simply wouldn't take it. Meaning that they might not believe in them quite as much as they say they do.