So many U-turns does Darling know if he is coming or going
Alistair Darling has been forced to scrap his proposals of taxing foreign profits but the problem has not gone away. The probability now is that the chancellor is so dizzy from performing U-turns he chooses to sit back and do nothing.
Doing nothing is a very sensible option for a chancellor when so many of his past actions have been meddlings that either lacked logic or popularity, but on overseas corporate taxes, it was businessmen who asked for reform. They happened not to like the changes the chancellor proposed and said so loudly, but that does not mean changes are not as necessary now as when they were demanded.
Darling consulted and listened but he has received no brownie points for doing so: he is now consulting and listening again but he has little incentive to put forward new proposals which - as they are supposed to be tax neutral - have no upside for him.
Business is demanding new proposals quickly: Darling has every reason to let the process drag on – possibly until after the next general election. He has far better things to do: not only balancing the budget but resolving other past proposals that have proved unpopular.
His in-tray contains complaints about duty on second-hand cars, the replacement of air-passenger taxes with plane taxes and the unfinished fudge on the 10p tax.
A stronger chancellor might have pushed through reforms like the overseas profits tax irrespective of business’s view but Darling is weak and is weakened by each U-turn. It allows pressure groups – in this case the multinationals – to push him around, further undermining his authority each time.
Major corporations that have no intention of quitting Britain have been allowed to use that threat to win their way.
It may be unfair, but replacing Darling in a cabinet reshuffle might not only help strengthen the prime minister’s position, it might help business too by giving it a strong chancellor.
