Economy, Business and Tax
Renew believes that capitalism and free markets have been to the great benefit of the UK, and will continue to be so – but that business is part of society and that a range of corporate activity has now become unacceptable. This includes excessive increases in boardroom pay, the disregard by many companies of all stakeholders except shareholders, aggressive tax avoidance by the large digital content providers and a spectrum of corporate scandals.
Renew will reform corporate structures and incentives to resolve these problems. A fundamental goal of Renew in government is to increase sustainable economic growth and an economic renaissance in the UK, and to ensure that the many people who have been left behind get their fair share of this growth.
We will reform the UK taxation system to make it more efficient, fairer and simpler. Renew recognizes the many political difficulties of reforming the tax system in the UK, but believes that such reform is now both urgent and long overdue. Leverage fiscal incentives to ease entrepreneurship and support the birth & growth of new enterprises.
Flat Productivity, Slowing Economy, Poor Management, Low Wages mark the current picture in the UK economy. Since the financial crash in 2008, UK productivity has not grown. This lack of productivity growth has contributed to falling average wages and lower tax revenues. The UK has had the lowest wage growth of any G7 country over the past decade despite eight years of economic growth and high employment. The share of unemployed people in the UK is now smaller than it was before the financial crisis, but average real wages have fallen by an average annual rate of 0.3%. Brexit has harmed the UK economy as a weaker pound has reduced household incomes and uncertainty has lowered investment. In the long term, Brexit is likely to lead to significant losses in UK Gross Domestic Product (GDP) compared with remaining fully in the EU and its single market. The more restrictions the UK faces in accessing the single market, the worse will be the macroeconomic effects.
- Many factors affect productivity in the UK, most of which require long-term solutions and input from different areas of government. These include use of technology, infrastructure, research, and education. Renew will seek to develop all these factors, and will do so in a manner where the evidence has shown that government intervention is most productive.
- The provision and renewal of infrastructure around the country will be a critical goal of Renew both to increase productivity and also to enhance opportunity throughout the country. Relevant infrastructure will include the foundations underpinning education, transport and digital technology. We recognize the benefits of both private and public provision, also the weaknesses of both types of delivery, which frequently require Government intervention to redress.
- Renew will ensure that either as part of the EU or not we maintain our free trade deal with EU countries and with countries with which the EU has trade deals.
- Renew will promote ‘ investment-led growth’ by raising public investment, and encourage long-term productive investment
- Renew will rebalance the economy through ‘new industrialisation’, using the fourth industrial revolution to create new innovative industries across the country.
- Achieve higher productivity by investing in skills and access for business to the talent they need.
- Encourage open markets which reduce the near-monopoly power of dominant companies, particularly in the digital economy
The development of tax policy in the UK over past decades has been inconsistent and incoherent. The UK tax system is overbearing and complex, there have been numerous policy reversals, and many aspects most needing reform have been not been addressed due to the political weakness of both the Conservative and Labour parties.
- Simpler, more carefully considered taxes that answer to lived experience, for example for those who run SME’s, is key to encouraging entrepreneurship in the UK.
- Reduce the complexity of tax returns to increase transparency, isolate loopholes and remove them.
- Develop easy to use, innovative digital platforms for everyone (individuals and corporations) to calculate and pay their taxes, which makes it simpler to pursue and investigate tax evasion.
- Review the effectiveness of consequences related to fiscal evasion, both monetary and non monetary, focusing on what works internationally.
- Regularly inform the public about the level of evasion, breaking it down by sector, and showing the consequence on public services.
- Ending tax avoidance & evasion, increasing tax collection efficiency
- Multinational online companies must be taxed for their “digital presence” and value generated in a country.
- Participate in an EU tax authority to tackle cross border avoidance and evasion.
- Create transparency in company ownership structures by requiring the disclosure of personal details of owners and beneficiaries of companies on the public register.