Can Osborne really take credit for Glaxo's move?

It was a 2009 Labour announcement, not Osborne's Budget, that persuaded Glaxo to invest.

For George Osborne, who declared that his Budget "unashamedly backs business", GlaxoSmithKline's announcement of a new biopharmaceutical factory in Cumbria [its first manufacturing facility in the UK for 40 years] couldn't have come at a better time. In his interviews this morning, the Chancellor didn't miss an opportunity to take credit for the decision:

You have GlaxoSmithKline, one of the world's biggest companies, one of the great British success stories, saying the budget has changed their view of Britain as a place to invest.

They're going to create 1,000 jobs here. Now, surely my responsibility as the country's chancellor is to get the economy moving, to get jobs created, and when big companies say that about Britain, people should sit up and notice that we are changing the British economy for the better.

It is rather misleading, however, for Osborne to claim it as an overnight success. The main reason for GSK's move is the introduction of a "patent box" [which introduces a lower rate of corporation tax on profits generated from UK-owned intellectual property], a measure previously announced by Alistair Darling in the 2009 pre-Budget report. As Labour has highlighted this morning, yesterday's Budget document even admitted as much [see Table 2.2, p.53].

In his statement, GSK chief executive Andrew Witty made it clear that the patent box was the ultimate pull factor:

The introduction of the patent box has transformed the way in which we view the UK as a location for new investments, ensuring that the medicines of the future will not only be discovered, but can also continue to be made here in Britain. Consequently, we can confirm that we will build GSK's first new UK factory for almost 40 years and that we will make other substantial capital investments in our British manufacturing base.

In fairness to Osborne, however, Witty also cited further cuts to the general rate of corporation tax, which will fall to 24 per cent next month, having stood at 28 per cent when the coalition took office. Of interest, then, is the timing of GSK's announcement. The company's press office has confirmed to me that the decision was taken several days in advance of the Budget. To some, the conveniently timed announcement by Witty [who was knighted in 2012] has a whiff of corporatism about it.

George Eaton is political editor of the New Statesman.

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What the debate over troops on the streets is missing

Security decisions are taken by professionals not politicians. But that doesn't mean there isn't a political context. 

First things first: the recommendation to raise Britain’s threat level was taken by the Joint Terrorism Analysis Centre (JTAC), an organisation comprised of representatives from 16 government departments and agencies. It was not a decision driven through by Theresa May or by anyone whose job is at stake in the election on 8 June.

The resulting deployment of troops on British streets – Operation Temperer – is, likewise, an operational decision. They will do the work usually done by armed specialists in the police force protecting major cultural institutions and attractions, and government buildings including the Palace of Westminster. That will free up specialists in the police to work on counter-terror operations while the threat level remains at critical. It, again, is not a decision taken in order to bolster the Conservatives’ chances on 8 June. (Though intuitively, it seems likely to boost the electoral performance of the party that is most trusted on security issues, currently the Conservatives if the polls are to be believed.)

There’s a planet-sized “but” coming, though, and it’s this one: just because a decision was taken in an operational, not a political manner, doesn’t remove it from a wider political context. And in this case, there’s a big one: the reduction in the number of armed police specialists from 6979 when Labour left office to 5,639 today. That’s a cut of more than ten per cent in the number of armed specialists in the regular police – which is why Operation Temperer was drawn up under David Cameron in the first place.  There are 1340 fewer armed specialists in the police than there were seven years ago – a number that is more significant in the light of another: 900, the number of soldiers that will be deployed on British streets under Op Temperer. (I should add: the initial raft of police cuts were signed off by Labour in their last days in office.)

So while it’s disingenuous to claim that national security decisions are being taken to bolster May, we also shouldn’t claim that operational decisions aren’t coloured by spending decisions made by the government.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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