Time for further business tax increases must end, says CBI leader
A lack of policy detail are common complaints from firms, the Government is to be told.
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Your support makes all the difference.The Government is being urged to “flip business taxation on its head” amid complaints from firms about a lack of policy detail to help them grow.
CBI director general Tony Danker will argue that “big choices” are needed from ministers in the coming weeks to help business investment following the impact of the pandemic.
He will say in a speech in Manchester that following last week’s announcement on plans to increase National Insurance contributions to support social care, the time for further business tax increases “must end”.
The lack of detail and pace from the Government on some of the big economic choices we must make as a country, are the biggest concerns for business
Mr Danker will warn that a return to “business as usual” in economic policy would be a mistake, with the UK lagging behind some of its international competitors in driving investment in the industries of the future.
He will say: “The lack of detail and pace from the Government on some of the big economic choices we must make as a country are the biggest concerns for business.”
He will call for a series of measures including rewards for firms which invest, new individual training accounts to make it easier to access support, speeding up major infrastructure projects and replicating the successes of offshore wind in hydrogen and other emerging industries as well as rebalancing economic regulation.
He will add: “This autumn requires big choices that will define a decade.
“Brexit Covid, climate change all demand that the UK forges a new growth story to compete in the world, and believe me this will be a competition, for new markets, new skills and technological advantage.
“One of the great risks of the Budget, the Spending Review, and the Global Investment Summit – all set for this autumn; as well as our net-zero strategy, infrastructure strategy, and skills policy – is that we are too complacent, too proud about what we’ve done so far.
“The 2021 reality is quite different. Over the last two years, every country’s strategy to win the future has shifted dramatically. Every country is choosing to invest in the future.
“Investing by the UK. That must be our mantra now, so that the decade ahead does not repeat the low growth, zero productivity of the decade past, and Government holds the key to unlocking it all.
“After the pandemic, we in business believe that we should pay our fair share to tackle the debts of Covid. That is why many business leaders accepted the jaw-dropping six-point corporate tax increase announced in March. But there is a real risk now that the Government will keep turning to business taxes to carry the load.
“Choosing national insurance for social care funding is the latest example. I am deeply worried the Government thinks that taxing business – perhaps more politically palatable – is without consequence to growth. It’s not.”
A Treasury spokesperson said: “Throughout the pandemic we supported businesses through our £400bn Plan for Jobs, which includes £80bn in loans, £25bn in grants, £16bn in business rates relief and our £68.5bn furlough scheme.
“We’ve also shown we are committed to supporting business investment, extending the Annual Investment Allowance increase for another year and introducing the super-deduction, the biggest two-year business tax cut in modern British history.
“The impact of the pandemic means we have had to make the tough but responsible decision to raise taxes, we’ve asked both individuals and businesses to pay a bit more as we get our public finances back on a sustainable path.”