Research by the Department for Innovation, Universities and Skills (part of what was once the DTI) has found that sizeable British-owned companies are creating more wealth than their European counterparts. They’re actually generating 23% of the ‘added value’ created by Europe’s top 750 firms, coming in ahead of Germany and France. So while the rest of Europe is on tenterhooks over their footballers' fortunes in the European Championships, at least we can claim some superiority.
The calculation is made by taking firms’ sales, and subtracting expenditure on bought-in goods and services. The value added by the top 800 UK-based companies was found to have grown 9.6% over the past year to £636.3bn, driven largely by the banking and oil sectors. Among the top five wealth propagators were Royal Dutch Shell, BP, HSBC and Royal Bank of Scotland.
The bad news is that the research found such firms are also paying more corporate tax than their European rivals. The top 185 wealth-creating companies in the UK handed over 12% of the added value they created in taxation last year. Their German equivalents paid 6%, and the French and Swiss paid 8%.
The report may be gloomy but it comes at a good time for those demanding change to the corporate tax system – a new working group meets today to investigate its competitiveness. Just days ago Alderman David Lewis, London’s lord mayor (ie. the London mayor you've never heard of, not the 'buffoon' who keeps harping on about teen boot camps) made a rare public criticism of the government, demanding cuts in corporation tax from 28% to 24%, to help prevent an exodus of companies relocating to more competitive nations like the Netherlands and Ireland.
Given the lack of direct interest in the footie, watching our corporate big guns aim volleys at Alistair Darling may prove a worthy substitute.