The Confederation of British Industry (CBI) is calling on the Chancellor of the Exchequer to cut taxes and reduce employment rights in an "all-action Budget" on 23 March.
In a letter to George Osborne, the CBI's director-general, John Cridland, says that ministers should "signal a road map for reducing the 50p tax rate", a measure put forward by Labour but retained by the Coalition Government as part of its deficit-reduction programme. The CBI argues that "mobile talent needs a good reason to do business in the UK".
Equally controversially, the CBI is calling on the Government to return to the pre-1997 position on employment rights, where an individual only has a right to claim for unfair dismissal after two years, rather than the one-year threshold now in place. That, says the CBI, would "give companies more time to assess the potential of a new employee, thereby giving firms the confidence to hire new staff without the threat of a tribunal if it doesn't work out".
The organisation is also asking for the employment tribunals system to be strengthened "to weed out weak and vexatious claims". Although Prime Minister David Cameron has dropped vague hints that he may look again at the legal position on industrial action, especially in essential public services, there has been no sign that ministers want to reduce employment rights as such.
The call from the CBI comes after Mr Cameron's speech to the Tory Party's spring conference in Cardiff yesterday, in which he promised a Budget that would "tear down the barriers to enterprise". Earlier, Mr Osborne told the conference his Budget would pave the way for the setting up of "enterprise zones" with lower taxes to encourage new businesses in a bid to stimulate the economy.
Mr Cridland said: "This Budget must demonstrate a relentless focus on growth to help get the UK working again. We need an all-action Budget, which boosts exports, investment and jobs. And we want to hear more about how the planning system will genuinely deliver swift decisions on infrastructure and less about abolishing the Infrastructure Planning Commission."
Other concessions sought by the CBI include a reform of the Carbon Reduction Commitment, and a wider definition of business assets exempted from capital gains tax. It also wants to see the UK Trade and Investment agency strengthened to "provide more targeted support" for exporters, and improvements in the Enterprise Investment Scheme to bridge the funding gap for small and medium-sized enterprises. Ministers should "ensured the extra support announced through the Export Credits Guarantee Department reaches the firms it is aimed at", the CBI said.
As the shortage of credit continues to damage the prospects of medium-sized corporations as yet unable to tap capital markets, the CBI urged the Government to encourage the creation of a new corporate bond market for mid-caps to increase the supply of capital. Bigger firms have largely been able to sidestep the credit crunch by issuing equity and commercial bonds and paper in a way that their smaller rivals could not emulate simply because of their size.
Ian McCafferty, the CBI's chief economic adviser, said ministers were right to "stay the course" with their plans to bring the budget deficit back to balance by 2015, but cautioned: "As spending cuts put household spending under ever greater pressure, the Budget must create the right conditions for businesses to invest and grow."Reuse content