Outlook: CBI Budget
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THERE WAS always a slight air of unreality about the love-in between business and the Labour Government. Yesterday's Budget submission by the CBI marks a return to normality. Not yet in anger, but rather in sadness, the bosses' organisation has told the Government that its proposals spell too much costly red tape for business.
The problem is not the actual burden of taxation on companies, nor even the windfall tax, but rather the requirement that companies implement some key measures of government policy. These include the national minimum wage, the working time directive and the working families tax credit. These are an administrative headache for big employers, and a bit of a nightmare for small companies. While the Government has made much of its plans to encourage small businesses, with the Pre-Budget Report and the Competitiveness White Paper emphasising entrepreneurship, Gordon Brown will have to deliver the goods next month just to offset the adverse impact of these other measures. They fall most heavily on the tiniest firms.
Recent research at Bath University has shown that simply collecting national insurance and income tax contributions through PAYE costs businesses employing 1-4 people pounds 279 a year, whereas the cashflow each quarter means big companies benefit to the tune of pounds 11 an employee. The WFTC could actually end up requiring small employers to pay cash up-front to low-paid staff before they can reclaim it from the Inland Revenue.
Given that the Government buried the reports of two taskforces on small business - one on finance for high-tech companies and one on smaller quoted companies - by publishing their papers on the same day as the Pre-Budget Report, it is easy to see why the business organisations have become sceptical about how much genuine help the Government really has in store for the Budget.
They may be pleasantly surprised, for the Chancellor is sincere in his desire to stimulate enterprise and wealth-creation for the long-term benefit of the economy. Even so, a bit of tension in business-Government relations is a healthy sign of normality. It will keep both sides on their toes.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments