New CBI Chief Warns On UK Taxes

by Jason Gorringe, Tax-News.com, London

08 September 2006

Delivering his first major speech as head of the Confederation for British Industry (CBI) on Tuesday, Richard Lambert argued that UK companies are over-taxed and over-regulated at the expense of profit, investment, jobs and national prosperity.

The CBI has an enormous role to play in persuading the public and policy-makers to support business, he stated, adding that the governmental and private sector aim should be for a free trade, low tax, high skill economy.

He suggested that:

"Failure will bring an inward-looking, protectionist state bedevilled by high unemployment and high taxes."

Mr Lambert told those attending the event in London, which was hosted by the Social Market Foundation, that business is an attractive source of tax revenue for governments because companies do not have a vote, and the public doesn’t care about increases in corporate taxation, especially if companies are unpopular.

But, he explained that:

"Business is the source of wealth on which almost everything else depends. In a world where capital can flow from high tax to low tax economies, the burden of heavy corporate tax is not just born by shareholders - a large proportion of whom represent pensioners anyway - but also by customers, suppliers and, particularly, by employees. High business taxes cost jobs and hold down wages."

As business taxes have increased, the UK has slipped down the league of international competitiveness, and Mr Lambert argued that: "We need an urgent and high level debate on this matter which, for too long, has been the Cinderella of our economic policy."

Lambert succeeded Sir Digby Jones as CBI Director-General in July.

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