Jones To Pull No Punches In Pursuit Of UK Corporate Tax Reform

by Robert Lee, Tax-News.com, London

09 July 2007

Britain's new Trade and Industry Minister Sir Digby Jones has promised "not to take any prisoners" in his pursuit of a simpler and lower tax corporate tax regime for business operating in the UK.

Sir Digby told the Daily Telegraph in one of his first interviews since his surprise appointment by Prime Minister Gordon Brown that: "If I'm overseas, banging the drum for Britain, and they tell me they are worried about our rate of tax, I can promise you as soon as the wheels hit the tarmac in the UK I will be over to Number 11 to tell (Chancellor of the Exchequer) Alistair Darling."

The appointment of Jones to the Labour government has raised many eyebrows, since he was a frequent and outspoken critic of Gordon Brown's tax and economic policies in his former role as director general of the Confederation of British Industry, when Brown was Chancellor. He also accused former Prime Minister Tony Blair's government of being “in thrall to the unions". Nevertheless Jones, having accepted a Labour peerage, will take a seat in the House of Lords and has been given the task of overseeing government's buisness and tax polices.

Jones has not become a member of the Labour Party itself, and has even refused to reveal whether he would vote for the Labour Party in the next election, telling BBC Radio 4's Today programme that: “How I vote is going to be my business, in private."

He went on to tell the programme: "What I do know is I will take the Labour whip in the House of Lords. I am delighted to get the chance to put business, wealth creation and job creation right in the middle of the decision-making and policy formulation of the Government."

While Jones's comments to the Telegraph are unlikely to make him many friends in Whitehall, he believes that his unique perspective as an outsider whilst serving in the government will enable him not to get bogged down by party politics in putting across his arguments.

"I won't be taking any prisoners in this new role," he told the Telegraph. "You can do that if you're coming in from outside like me. We have access to Number 10 and Number 11 and I can make these points very forcefully."

One area of tax policy that Jones said he would be keen to see changes in was local tax breaks granted by Regional Development Agencies (RDAs) to foreign companies, a policy he derided as "tax bungs" with little economic benefit.

"I'd like a very good look at that. If you get a company that only comes to a particular region because it is incentivised to do so you've got to ask serious questions about whether they would be there if that incentive wasn't there - not just because of a tax bung, frankly," he observed.

Another priority for Jones is to ensure that the UK's flexible labour market is maintained, and he pledged to be relentless in the pursuit of cutting red tape, particularly for high value-added industries which have become a significant pillar upon which the UK economy now rests. "That's somewhere we must not in any way put any more regulation at all," he concluded.

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