IoD Warns That Tax And Spend Is Here To Stay In Britain

by Jason Gorringe, Tax-News.com, London

01 May 2002

The Head of the Policy Unit at the UK Institute of Directors (IoD), Ruth Lea, has argued in the wake of the National Insurance increases to fund investment in the NHS that 'tax 'n' spend is here to stay'.

In a statement released this week, Ms Lea commented that Chancellor Gordon Brown had taken an enormous gamble by increasing NI contributions for employers and employees. 'The increased funding for the NHS was, I felt, quite mind-blowing,' she observed, adding that: 'It is very difficult to see how the NHS can usefully allocate these sums with its current highly centralised and politicised restrictions.'

The IoD Policy Unit head warned that if taxes continue to rise at the same rate as currently in the United Kingdom, the private sector - which is set to bear the brunt of the increase in the country's tax burden, will be crowded out by the less efficient public sector, thus draining the UK of its dynamism and competitiveness.

'There is already convincing evidence that UK competitiveness is being damaged by the higher taxes and heavier regulations that have been imposed over the last five years,' she commented, citing the nation's falling placement in league tables such as the Institute of Management Develpoment's World Competitiveness Yearbook, also released this week.

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