Cut benefits? Yes, Let’s Start With Our £85bn Corporate Welfare Handout

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Courtesy of Aditya Chakrabortty @ The Guardian:

Last week, as the Tory faithful cheered on George Osborne’s new cuts in benefits for the working-age poor, a little story appeared that blew a big hole in the welfare debate. Tucked away in the Guardian last Wednesday, an article revealed that the British government had since 2007 handed Disney almost £170m to make films here. Last year alone the Californian giant took £50m in tax credits. By way of comparison, in April the government will scrap a £347m crisis fund that provides emergency cash for families on the verge of homelessness or starvation.

Benefits are what we grudgingly hand the poor; the rich are awarded tax breaks. Cut through the euphemisms and the Treasury accounting, however, and you’re left with two forms of welfare. Except that the hundreds given to people sleeping on the street has been deemed unaffordable. Those millions for $150bn Disney, on the other hand, that’s apparently money well spent –whoever coined the phrase “taking the Mickey” must have worked for HM Revenue.

Politicians and pundits talk about welfare as if it’s solely cash given to people. Hardly ever discussed is corporate welfare: the grants and subsidies, the contracts and cut-price loans that government hands over to business. Yet some of our biggest companies and industries operate a business model that depends on them extracting money from the British taxpayer. The operators of our supposedly privatised train services are kept afloat by billions in public money. Or take the firm created by billionaire Jeff Bezos: last year it emerged that Amazon had paid less in corporation tax to the UK than it had received in government grants.

The bill for corporate welfare is huge – and largely hidden. We know a lot about the people who claim social welfare: we know how much each benefit costs the public, the government sets strict rules for eligibility – and we even have detailed estimates for how much cheating goes on. Between them, Whitehall, academia and NGOs have churned out enough surveys on social welfare claimants to fill a wing of the Bodleian library. But corporate welfare? The government has itself acknowledged: “There is no definitive source of data about spending on subsidies to businesses in the UK.” The numbers are scattered across government publications and there is not even any agreement on what counts as a corporate handout. Continue reading