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Tuesday
Apr262011

CBI Calls for rate cut

The influential Confederation of British Industry (CBI) has called for the removal of the 50 pence income tax rate in a recent report. The report welcomes the the reduced corporation tax rates that are being introduced over the next three years but feel that a target rate of 18% should be a long term goal for the government.

The report is called "Making The UK the best place to invest". It outlines what they see as critical factors that are currently preventing companies from investing in the UK. The report reinforces the the view that investment will play a vital role in the country's economic recovery. One of the more worrying quotes from the report is the "UK's reputation as good place to invest is under threat".

The CBI's Director-general John Cridland is quoted as saying: "with competition for international capital so fierce, the government must play up our strengths and remove the stumbling blocks to investment. Time isn't on our side and we have less than 5 years to turn things around".

400 UK companies took part in the study and it contains what many will feel are sound suggestions for the government.  These suggestions include high-speed broadband provision and moves toward a low-carbon economy. One the suggestions that may be viewed as controversial is their support for the principal of private provision for public services. Regulation, planning and infrastructure are all mentioned in the report but the tax regime is the dominant feature in its conclusions.

Those conclusions appear to chime with business leaders. Amanda Sourry, Chairman of Unilever UK & Ireland is quoted as saying "It is absolutely critical to the long-term success and competitiveness of the UK economy that a more compelling business case be built to encourage investment here". The report follows another CBI survey of 121 senior business leaders which took place last October. The survey concluded that between 8% and 12% of companies have not decided where ther main location will be in 5 years. 

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