2007 Budget - Businesses Call for a Cut in Tax and Red Tape
In advance of this year’s Budget, David Frost, director-general of the British Chambers of Commerce (BCC) said:
“Gordon Brown needs to create a framework where businesses can thrive so we have asked in our Budget submission for corporation tax to be cut from 30pc to 25pc.1
“UK businesses have to work in an overly taxed and regulated environment, which makes it more difficult for them to compete against businesses from low tax economies.
“A cut in corporation tax would be a big boost to the competitiveness of the UK.
“We would also like it made easier for SME’s to engage with the Government. Red tape is a real nightmare for businesses, in particular SME’s who do not have the spare cash to absorb the costs of compliance or the staff to deal with the growing number of regulatory requirements. Our 2007 Burdens Barometer found that the cost of red tape since 1998 has soared to £55.66bn.2
“If Gordon Brown wants to show his commitment to enterprise in the UK then these two key areas, a reduction in corporation tax and a simplification of regulation needs to be addressed.”
Click ‘more’ for the BCC’s Budget Submission key points.
BCC Budget Submission key points are:
Tax and Regulation
BCC members are concerned at the growing complexity of the current tax system and continuing burden of regulation. Most SME’s do not have the resource to outsource their tax, human resource and other employment related obligations. The current operating environment is becoming very complex and in many instances most SME’s are unaware of legislation or processes that affect them. 99.9% of all private enterprises are classified as a SME and we urge the Government to acknowledge their significance to the UK economy and simplify the tax and regulatory environment.
Education and Skills
It is fast becoming a cliché that a highly skilled workforce is central to the continuing success of the UK economy. While it is clear that the Government is committed to improving the skills of the domestic workforce and putting business needs at the heart of this agenda, we believe that there are still a number of steps that could be taken to refine and improve the current infrastructure. The needs of SME’s must be taken into account in the development of the new 14-19 diploma system; while we believe the Train to Gain model of support for smaller businesses is the right way to engage the harder to reach in training. However there is significant evidence that Train to Gain is not yet functioning effectively enough; We are not convinced that the Skills for Business network is adding enough value in its current form. Leitch offers a real opportunity to reform Sector Skills Councils and get the most out of the network.
Transport
BCC members consistently, over time and across the country, register that this country’s infrastructure is one of their top concerns. Failures of our transport infrastructure, caused by under-investment, currently cost our members £17bn a year and that figure is rising. If Britain is not to fall behind its competitor nations this failure must be rectified. We need an integrated, sustainable transport system which delivers real choice across different modes of transport and meets the needs of business. The Eddington report includes many sensible measures but it is our view that it has not gone far enough. We need a national 30 year framework backed up by a real and sustained commitment to maintain levels of expenditure necessary to deliver real improvements.
Business Rates and Business Support
The British Chambers of Commerce remains opposed to relocalisation of the business rate under any circumstance. Businesses also want to see the Local Authority Business Growth Incentive Scheme reformed so that the principle of incentivising Local Authorities to promote economic development is retained but the benefits ring-fenced to projects that will promote economic development. The Business Support Simplification Programme must ensure that businesses are at the heart of testing the Product Development Group recommendations to ensure that BSSP is not solely a top-down policy exercise. Only by doing that will the right services that businesses themselves need be incorporated into the final product offerings. BCC members are also keen to see the expansion of Business Improvement Districts (BIDs), which give businesses an accountable and voluntary means of raising additional funds for specific projects decided on by them.
