Tory corporation tax reduction proves we are not in this together, UCU to tell Browne review into university funding

If George Osborne carries out his plan to make the UK the G20 country with lowest level of corporation tax he will be depriving the Treasury of £6.4bn - more than the planned savings the new government wants to achieve this year.

Speaking to members of the review at a special session with the CBI later today, the union will say that the Tories have their priorities upside down. UCU will say that authorising tax giveaways that are more than the government wants to slash from public services would be a disaster for the UK. The union will add that in other countries big business is expected to contribute to the education system from which they benefit while in the UK it seems it is students and their parents who have to foot the bill. UCU will say it does not believe Britain's future is as a tax haven for large companies with no loyalty to the UK or its economy.

UCU will say the UK cannot win a race to the bottom in terms of low wages or ever reduce its corporation tax low enough to compete with small countries such as Ireland or those in Eastern Europe.  The UK currently has a corporation tax lower than all the G7 countries apart from Italy. Earlier this year, the union recommended raising corporation tax to just the level of the G7 average to raise the funds to be able to abolish university fees.

The union's proposals would still leave the UK's corporation tax below that of France, Japan and the United States and 96% of companies in the UK would be unaffected by the change.UCU said its proposals were in response to the landmark Dearing report, which called for students, business and the state to share the cost of higher education.

UCU argues that its plans for businesses to fund their fair share of the higher education bill are a radical and pragmatic response to a pressing problem for the UK. It cited Conservative Mayor of London Boris Johnson's 2p in the pound tax on central London businesses, to fund the Crossrail project, as an example of business paying its fair share for public services from which it benefits.  

UCU general secretary, Sally Hunt, will tell the committee today: 'Starving education of funds and making families pay more to access a university education, while authorising billions in tax giveaways to big business will be a disaster for the UK. We need a highly-skilled workforce that can compete in the high-knowledge global economy.

'We do not believe the UK's future is as a haven for companies who want to move capital and have no loyalty. The Tories' proposals to lower corporation tax and deprive the Treasury of over £6bn prove once again that their talk of us all being in this together is an offensive soundbite.

'Britain can never reduce its corporation tax low enough to compete with small countries such as Ireland or those in Eastern Europe. Our proposals are based on fairness and will be welcomed by hard-working families who want their children to benefit from education but are put off by the potential debts created by university fees.'

In place of fees: time for a Business Education Tax?

Source: OECD

Notes

• £6.4bn figure comes from UK corporation tax dropping down from 28% to 20% (same as Turkey) at an average loss of £800m per % - source: Guardian
• UCU general secretary, Sally Hunt, and a representative from the CBI are due to give evidence to the committee on 'sustainability & employer contribution' from 12.10 - 12.40 at the hearing at the University of Bristol.