Business is part of the solution
International solutions are needed to address this, just as they are needed to address the multitude of other issues arising from rapidly increasing globalisation. However, PWC’s 100 Group Survey Results 2019 reports that the total tax contribution of the 100 group members (representing the biggest companies operating in the UK) was £84.7 bn or £11.7bn of total Government tax receipts and those companies also contributed £26.8bn in total capital expenditure in the UK. Of the £84.7bn total tax contribution, £26bn was tax paid by the companies (Corporation Tax, NIC and business rates etc) and £58.7bn was collected on behalf of the Government by way of income tax deductions under PAYE, net VAT etc.
So it might be reasonable to conclude that whilst there are “problems” around big business which need to be addressed, we would have even bigger ones without the tax revenues generate
Small and medium-sized enterprises (SMEs) comprise 99.9% of businesses by number and they contribute more than half of the turnover of the UK economy. According to HMRC figures there were around 2.25m traders registered for VAT in 2018/19. There were hundreds also paying specific new taxes, such as air passenger duty, landfill tax, climate change levy and the aggregate levy. The UK’s businesses also provide millions of us with purpose, challenge, structure and meaning in our lives although, of course, also a measure of the related stress and pressures.
Most importantly it is evident to me that business is already part of the solution to the challenges of the future and is becoming more so. This is, to some extent, down to the change in perceptions of this generation of business leaders, but more to do with the millennials coming through, who have been described as “a generation of opinionated sceptics”.
A study in 2015 by Core Communications found that millennials are “prepared to make personal sacrifices to make an impact on issues they care about” including “taking a pay cut to work for a responsible company”.
The famous US economist Milton Friedman’s view that “the social responsibility of business is to increase its profits” is history. Box ticking CSR is also a thing of the past. The coming generation of business leaders will undoubtedly, in my view, be at the heart of meeting the big challenges before us.
Northern Powerhouse Ambassador, Institute of Directors