Anthony Hilton: Hijacked by the Budget agenda

It never fails to surprise me the way sophisticated companies allow politicians to use them for cheap publicity stunts.

Anthony Hilton: Hijacked by the Budget agenda
Anthony Hilton: Hijacked by the Budget agenda

The decision by Chancellor George Osborne to cut the top rate of tax in this month's Budget was always going to be controversial. Inevitably, saying on the one hand that the yield from the 50p rate was negligible, while saying on the other that the additional burden was driving people from these shores, ran the risk of being seen as ideological rather than economic. It would provoke claims that the Conservatives were pandering to their rich supporters in the City, while also making strenuous efforts to cut back on tax allowances and benefits for people further down the food chain.

The Government's response was to try to position the tax as damaging to business. Where it got absurd was that within hours of cutting the tax, Osborne went on to claim the policy was delivering immediate results by citing a string of companies that had just made announcements that they were planning to expand here.

Typical among these was GlaxoSmithKline. Its chief executive Sir Andrew Witty found himself on the Today programme the next day speaking shortly after the Chancellor, on the same show, had specifically claimed that the Glaxo decision was influenced by the tax cut. Witty did not confirm this. Instead in his interview he talked about the drivers of the decision being the new patent regime and the fact the UK is becoming more competitive as costs rise overseas.

One suspects, however, that the impression that will stick with listeners is the Osborne message that his tax cut delivered increased investment. It has the advantage of simplicity - and shameless delivery.

What surprises me is that companies allow themselves to get into such a position. Gordon Brown would never tell anyone the date of the Budget until a few weeks before. But the coalition has had this date in the diary for months. Why is it that companies do not look at the calendar and decide Budget week is a very bad week to announce good news, because their message is almost sure to be hijacked for political purposes?

Anthony Hilton is City commentator on London's Evening Standard

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