If there’s one thing that can be said for the current British government, it’s that it’s pro-business. Together, prime minister David Cameron and chancellor George Osbourne want to lower the rate of corporation tax and introduce a number of measures that will attract major organisations to the country.
Of course, this isn’t revolutionary. But if PricewaterhouseCopers are to believed, the duo’s charm offensive is beginning to pay off, with as many as 15 multinational organisations already considering locating "substantial operations" in Britain - as reported in today’s Financial Times.
Not all of this is directly relevant for CPOs (pharmaceutical giant GlaxoSmithKline announced today that it would invest £500m in its first manufacturing facility to be built in the UK for 40 years, for example). But PwC partner Adrian Yeeles believes that one of the key areas in which global companies may benefit from by locating in the UK, is procurement. And he provides some compelling evidence.
US, Japanese and South Korean companies are among the 15 or so organisations thinking of shifting parts of their business to the UK, claimed Yeeles. Crucially, however, more than a third are currently located in Switzerland. "We are at a position now where the UK is starting to look extremely attractive for companies that want to set up either a holding company or an operational hub," he told the FT.
Establishing centralised procurement hubs in tax-friendly jurisdictions can deliver huge financial benefits, but it doesn’t come without drawbacks. First, the political ramifications and negative headlines that can result scare off many that would otherwise be interested. Second, the destinations themselves aren’t always the most attractive in terms of talent attraction.
But the UK is a location with a plentiful supply of skilled labour, it’s an attractive place to relocate to and in London it has one of the most vibrant, business-friendly cities in the world.
A year ago, we ran a feature in the asking whether Switzerland is procurement’s saviour, with the tax and infrastructure benefits it brings. Today, it’s the UK that’s promising the same.
David Rae is editor of Procurement Leaders. To subscribe to the magazine, click here.