CBI urges Brown to draw up emergency tax cuts

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The Independent Online

Business leaders today urged the Chancellor of the Exchequer to draw up a package of "emergency" tax cuts to boost sectors worst affected by the global slump.

Business leaders today urged the Chancellor of the Exchequer to draw up a package of "emergency" tax cuts to boost sectors worst affected by the global slump.

The CBI, the largest employers' organisation, said it was worried that by the time of a full Budget in March the economic climate would be so poor it would be too late to act unless plans had been drawn up. "What we are looking for in next month's Pre-Budget Report is a signal that they are going to do it," said a CBI spokesman.

In its submission ahead of the PBR, which lays out the Chancellor's thinking ahead of the Budget, the CBI said such a package should include tax cuts for business.

"Rather than focusing on the removal of barriers to investment and expansion, priority would have to be given to the removal of barriers to business survival," it said. "Cuts in taxes adding to current business costs should then come to the fore. These tax cuts might well be temporary."

It said aid should be directed at sectors most adversely affected by the recent terrorist attacks. It is certain to include tourism, agriculture and manufacturing. "There is also much that the Government could do to reduce the costs imposed on business by a raft of regulatory requirements outside of the fiscal policy field," it said.

However it said it was assuming that the economy would not deteriorate that far and drew up a submission that calls on Mr Brown to produce a "cautious and vigilant" Budget. Its main recommendations were: No further rise of any kind of Government-imposed costs on business; progress on targeted tax measures already under consideration and no further increases in public spending.

Digby Jones, CBI director general, urged Gordon Brown to embark on a long-term plan to reduce the tax burden on businesses, which has soared by £29bn since Labour took office in 1997. "Now is not the time to increase Government-imposed costs on business, either in the form of new taxes or red tape," he said.

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