With the 2016 Budget on the horizon, it is expected that announcements will be focused around key areas including income tax and pensions, further austerity measures through additional spending cuts, and NHS funding, with discussion expected around the privatisation of the NHS and mental health funding.
Ahead of Wednesday’s announcement, academics from Alliance Manchester Business School have shared their thoughts on what they’d like to see from the upcoming Budget.
Jakob Edler, Professor of Innovation Policy and Strategy
“The 2016 Budget should avoid making further reductions to those outlined in the autumn statement, including further cuts in science spending. It should also avoid imposing further reductions to the capacity of government to deliver policies.
“In addition, it’d be great to see further support pledged for innovation in the economy and society, with a focus on a broader understanding of the term rather than seeing innovation as just the transfer of scientific knowledge into the economy.
“It’d be greatly beneficial if the Budget revisited the agenda of using public purchasing in intelligent ways, to support policy goals and establish the UK as an attractive market for innovations. This entails more risk taking and more capacity in the public sector, but the leverage in terms of better public services, more effective delivery of policy and incentives to generate and sell innovations would be clear cut. This agenda has been reduced to the Small Business Research Initiative, which is pre-commercial procurement and although it is a good scheme that is very much worth supporting, it only makes up part of the much bigger, long-term picture.”
Karel Williams, Professor of Accounting and Political Economy
“The budget could usefully announce that the British government is moving beyond its hypocrisy in regards to denouncing and accepting corporate tax avoidance. The government will now have to get serious about clamping down on tax avoidance through measures which are within its power.
“Specifically, it should then signal change in two ways. Firstly, the government accepts the Organisation for Economic Cooperation and Development (OECD) argument that tax deduction of debt interest is being widely abused. The OECD proposes to set limits on the percentage of earnings before interest, taxes, depreciation and amortisation (EBITDA) that can be deducted for borrowing costs under national rules. These rules would be more restrictive than those currently being proposed by the EU.
“Secondly, the government is instructing its law officers to consider how best to discourage complex corporate group structures using multiple jurisdictions, including tax havens. Specifically, the government is looking at whether and how tax revenues could be diverted and denied to groups, like adult care chains, that have complex structures sustain tax avoidance and defeat accountability.”
A round-up of key announcements, in addition to thoughts and opinions from across Alliance MBS on the impact that these announcements will have on business and the wider economy, will be available to read following the Budget announcement.