CBI and BCC Urge Brown Not To Increase Tax Burden On Business

by Jason Gorringe, Tax-News.com, London

18 March 2003

Fears of damaging tax hikes in next month's UK budget have prompted two highly influential business organisations to submit separate warnings to the Treasury that jobs and investment will be at risk.

The Confederation of British Industry (CBI) and the British Chamber of Commerce (BCC) both submitted their pleas to the Treasury on Monday, and are especially worried about a fresh wave of 'stealth taxes'. CBI chief Digby Jones explained: "Firms are still extremely nervous about the possibility of tax increases. We will be closely watching the stealth tax radar screen on Budget day."

"We badly need a Budget that gets behind business and maintains the UK's reputation for having the best business environment in Europe. We cannot risk further cuts in corporate investment or long-term damage to UK competitiveness."

According to CBI figures, growing levels of taxation have already contributed to a 15% cut in business investment in the last two years. The Confederation also pointed out the tax burden is expected to grow by £47 billion between 1997 and 2005.

With Chancellor Gordon Brown facing the possibility of a growing budget deficit as the economy slows and spending rises, it seems unlikely that business will see any relief in the form of tax breaks come the budget. However, Britain's most influential business organisations continue to lobby the government to reduce the burden of taxation on companies.

"The burden of tax and regulation on business is eroding the UK's competitive advantage, costing jobs across the board. We will stress to the Chancellor that he must stimulate enterprise, invest for success and enhance our workforce if he is to set up the UK economy for a prosperous future," Isabella Moore, president of the BCC announced.

Calling for a review of the UK's increasingly complex tax regime, Moore warned the Chancellor: "Policy on regulation, taxation, proposals for regional assemblies in England, crime, land use planning, transport, and education can all work against productivity and must be reviewed or rejected before our competitive advantage is wiped out."

Recent research by the accounting firm PricewaterhouseCoopers has revealed that tax revenues have increased by £8 billon a year since 1997, with 80% of this extra burden falling on businesses and shareholders. Pension funds have also been badly hit.

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