Budget should cut red tape, says CBI
Wednesday 03 February 1999
Its Budget submission to Gordon Brown said recent legislation such as the introduction of the minimum wage and the working time directive had cost businesses pounds 5bn a year.
Sir Clive Thompson, CBI president, said: "This Budget comes at a critical point in the economic cycle with the UK facing a major slowdown in growth."
He added: "Many in the business community urgently need a confidence boost with a clear declaration of no increases in business taxation. We want changes aimed at reducing bureaucratic burdens."
The Trades Union Congress, in its Budget submission tomorrow, is expected to focus instead on the need for extra public spending to boost flagging areas of the economy, and for lower interest rates.
Its call will come as the Bank of England's monetary policy committee ends its monthly interest rate meeting. Most City pundits expect a further quarter point reduction to 5.75 per cent.
The British Chambers of Commerce backed the CBI's attack on red tape yesterday. Ian Peters, deputy director general of the BCC, said: "Genuine efforts must be made in the forthcoming Budget to reduce dramatically the amount of regulation."
In its submission, the CBI called on the Government to avoid introducing any big new initiatives. Its plea follows on the heels of recent changes in corporate taxation and the planned introduction of measures such as the minimum wage and working families tax credit that employers will have to implement.
Like the BCC earlier in the week, the CBI also urged the Chancellor to introduce a number of measures to encourage enterprise and innovation. It proposes a full one-year tax break for investment spending by small and medium sized companies.
Other measures on the CBI's entrepreneurship shopping list include tax credits for research and development spending by smaller firms, a reform of capital gains tax to encourage "serial entrepreneurs", and a higher ceiling on the amount of share options employees can be granted free of income tax.
Some proposals for stimulating high-technology start-ups were flagged in the pre-Budget report, but the employers' organisation would like to see more help for all small firms.
Kate Barker, the CBI's chief economist, said: "A lot of good ideas have been put forward. What is vital is that they are acted on in this Budget."
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