View from Westminster - March 29 (From Kidderminster Shuttle)

View from Westminster - March 29

10:30am Thursday 29th March 2012 in MP's View - Mark Garnier

The Community union has been raising a petition calling for the government to ‘do more’ to help Brintons. I hope to meet with them soon, to be able to chat with them about how we can all help Brintons and the wider carpet industry.

I am sure they will want to share with me how they are working with the management to modernise working practices to help Brintons return to sustained profitability, but their main question – how can the government help? – is an incredibly important one.

What has prompted this specifically now is that the Portuguese government has offered Brintons a cash incentive to move their looms and manufacturing headquarters from Kidderminster to their operations in Portugal. This is a fairly common practice and we in the UK have done this in the past. Pools of money to support investment is currently available in the UK and the Regional Growth fund, the Enterprise Initiative Scheme and other such schemes are available to businesses to finance projects and expansion.

The unions are asking, I believe, if the government will look at finding money to effectively match the offer from Portugal to make Brintons stay, but of course, the answer to that will be no.

I don’t think anyone would expect the government to enter into a bidding war to keep businesses from taking up offers from other countries; the outcome could end up with a ludicrous amount of taxpayers’ money pushed to private business just to stay still. It is right for government money to fund expansion, leading to new jobs; it is wrong to pay ‘retainers’ with no tangible outcome.

However, this debate does raise another question: why does the Portuguese government need to pay a financial incentive to lure a British business onto their shores?

Last week, the Chancellor brought forward the cutting of corporation tax to 22 per cent by 2014. If Brintons were to move to Portugal, they would have to pay as much as 29 per cent tax on their profits. For every pound Brintons pay in tax in the UK, they would have to pay £1.32 in Portugal. And that is the key point behind the budget last week. It is vital that we as a country are as competitive as possible on the international business stage. As a result of last week’s announcement, we now have one of the lowest corporation tax rates in the G20 and Brintons (and others) are significantly less likely to be lured by cash incentives elsewhere.

But the unions do have a good point. The budget also introduced measures for supporting creative technology, and measure to help research and development. But what are they doing for traditional industries such as carpet making? My job is to keep pressing the government on this to see how we can help.

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