The disruptive economy, corporation tax and turning the tide on cyber criminals are the topics on the agenda in this month’s column by IoD director general, Simon Walker…
George Bernard Shaw declared all professions to be conspiracies against the layman. He would have enjoyed a discussion among industry representatives that I recently attended. Each rightly adhered to the benefits of deregulation, competition and the removal of barriers to market entry – except that the spokesman for dentistry was concerned about UK patients flying to Hungary for crowns and implants, at a third of the cost of treatment in Britain. Without the UK’s General Dental Council to investigate misdemeanours, what recourse would they have if things went wrong?
The opticians’ representative was anxious about parsimonious British customers recklessly buying disposable contact lenses online from Dutch manufacturers. These are sold on the basis of UK prescriptions and dispatched duty-free thanks to the EU single market. The Dutch were undercutting British suppliers by two-thirds. But where were the health and safety checks, or protection against unsatisfactory suppliers?
Finally, the lawyers worried about wills and other legal papers. The lawyers’ protagonist deplored online websites’ do-it-yourself wills costing £45 rather than £2,000. True, a will can occasionally be a complex technical document requiring sophisticated analysis, but most often a simple legacy – to a spouse or an equal distribution to children – requires only minimal expertise. Customers are not stupid. If Hungarian dentists, Dutch opticians and do-it-yourself legal document providers are genuinely flawed, their sins will surely find them out.
I welcome the advent of the disruptive economy, including among the long-protected professional services.
End of the road for corporation tax?
Corporation tax is probably the least efficient and legitimate tax on the statute books. A good tax has three primary characteristics: it is simple, straightforward to collect and non-negotiable. On each of these points corporation tax deserves to be scrapped.
In 2012 Starbucks did a deal with HMRC to pay £20m in a voluntary corporation tax payment, which failed to satisfy its critics and sent a confusing message about what it owed. Taxes should be binary in nature: either the coffee chain had to pay £20m or it did not. Google either owed £130m this year or it did not. Backroom deals and the perception of special treatment for multinationals understandably leave a sour taste.
What is absolutely wrong, whether it comes from anti-capitalists or from those who pose as friends of business, is the suggestion that companies should pay more than their legal requirement: directors have a legal duty to shareholders, and they simply cannot throw away profits in order to appease campaigners or showboating politicians.
Turning the tide on cyber criminals
When adultery website Ashley Madison was hacked last year, not much sympathy was voiced for the philanderers who had their details stolen. But cyber crime is a threat to all businesses, as was revealed in a recent report from the IoD’s policy team. It contained the worrying statistic that nearly half of members have no plan in place to protect themselves from breaches. Awareness on this issue needs to be much higher, which is why we brought together cabinet office minister Matthew Hancock, the National Crime Agency and Barclays bank for an event at the IoD to launch the report. Many members said it was one of the most timely and informative events they had attended. With better preparation, we can turn the tide on the cyber criminals.
The disruptive economy, corporation tax and cyber criminals
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