Why doesn’t the govt incentivise large corporations to encourage economic activity?

[LadyGillingham]

India started with this about 20yrs ago. Microsoft, Google etc built massive offices and hired tens of thousands of people. Lots of Restaurants and other businesses came up to support this workforce. Over time, many other companies started moving their workforce there. Absolutely booming! They now have world class infrastructure and the economic activity absolutely thriving!! Needless to say, all these employees and businesses pay shit loads of tax !!

London is already a financial capital. Well connected by trains, tubes etc. Why doesn’t our govt incentivise businesses to set up shops here?

By taxing businesses, we are shooting ourselves in the foot!

no, I’m not rich. I know several ppl who are struggling to find jobs. Those with jobs are relatively low paid. I work for a large multi National corporation. My Indian counterparts are paid in USD and earn much more than me (adjusted for ppp)

Except all the more highly paid workers who have jobs working for those businesses, paying taxes in the UK and buying goods/services in the UK.

But the thing I don't like is "targetted" incentives that aren't open to all, i.e. Brown's "sweatheart" deals in the noughties such as to incentivise Vodafone to set up in the UK - that's blatant unfair competition if the same kind of deals aren't available to all firms.

Same with how the big employees get grants/incentives, etc but small businesses, self employed, etc., don't. Again, the idea is right to get big employers to the UK (or poorer regions within the UK), but there should be comparable incentives for self employed and small businesses, otherwise there's unfair competition etc.

I really wish we could go back to the 80s and 90s where there was lots of support for small businesses, new business start ups, getting unemployed back to work, etc. It mostly worked well and helped drive the growth in the late 90s (I think the last time we didn't have a deficit was late 90s/early 00s on the back of the enterprise and business push of the prior decade or two).

Supporting the "large corporations" looks good in theory, but it is a dangerous game. Large corporations are well able to move to wherever they want to and while creating jobs looks good on paper and makes great headlines for the government of the day, the jobs can just as quickly be lost by one bad decision or through the actions of another country or trading bloc.

A better question might be "Why doesn’t the govt incentivise small and medium-sized companies to encourage economic activity?"

SMEs account for 99% of the 5.5 million businesses in the UK. They employ 60% of the employees in the UK (over 16 million people) and account for around half of the turnover of the UK private sector.

In countries like Germany, Netherlands, Austria and in Scandinavia, SMEs receive huge government support - not just financial, but in the form of training facilities, simplified reporting, Chambers of Commerce and Trade organisations that actively work with the government to keep this sector bouyant. Germany's post-war "Wirtschaftswunder" recovery was driven largely by the SMEs.

In the UK, the government hardly gives SMEs the time of day - preferring to cozy up to big foreign companies (who then demand huge grants and tax-breaks under the threat of closing the UK factories and moving elsewhere) or to their donors.

In the areas I work in the government is absolutely terrible at allocating money to projects.

The projects are normally pet, ie belong to one political party so get thrown out/defunded when the new lot get in, even if they are long term.

Government ministers are also notoriously technically illiterate and have the attention span of a peanut. They aren't interested in anything that will produce results on a longer timescale than when they next come up for election. They are interested in quick wins and headlines. But science and technology does not work like that.

The biggest idiocy I have seen recently is the government proposal to spend £20 billion on carbon capture projects, which is just out and out stupidity.

Fortunately this is "future loaded", ie they are promising to fund when they may not even be around to do it. Hopefully it will be split so they spend £1 million in this electoral cycle, and £19.999 billion in the next one when the incumbents can cancel it.

I have no problem with a gov growing SMEs. The NI policy does the opposite though.

Nail on the head. Successive UK governments clearly hate the self employed and small businesses. Heaven knows why? Obviously too many politicians are in the pockets of big business so pander to their requirements and ignore the small businesses who don't have political influence.