The benefits of business being heard
IN a challenging economic climate it is critical that business has a strong voice. Over the last week we have had significant lobbying success in two key areas of economic policy, the result of months, and in some cases years, of work.
The Chancellor’s announcement to bring the Corporation Tax rate down in stages, from 28p to 24p, marks a significant return on the CBI’s tax competitiveness campaign of the last two years.
Notwithstanding the changes to capital allowances, this is the first time that the Government has accepted that reductions in Corporation Tax must lead to a net reduction in the tax take from business, and not just be revenue neutral.
We strongly welcome the road map for medium-term reform set out by the Budget. This should deliver a corporate tax regime fit for a globalised world, in which the UK is more competitive and the system more simple and stable. The staged introduction of the changes to the tax will allow businesses to plan ahead, and avoid unnecessary disruption.
The move to an annual tax relief allowance for higher earners' pension saving is a big step forward for both business and savers, and we welcome it. While retaining the revenue-raising goals of the previous regime, the new approach, suggested by the CBI, will cut £400m of bureaucracy for firms and ensure savers know where they stand.
We welcome these government announcements but recognise there are still significant issues impacting business, which we continue to work on.
For example, on a national level, there are concerns about the abolition of the Infrastructure Planning Commission which will see a transfer of responsibility from commissioners to ministers. The country urgently needs major infrastructure investment, and investors and companies need certainty from the planning system to invest with confidence in the UK If this is not achieved the economy will be undermined by crumbling infrastructure.
In the North East there are significant concerns over the centralisation of all strategic economic development activity, but we will continue our work to ensure that the organisation and control of economic development remains regional.
Be reassured on these concerns and other issues relevant to business the CBI continues to work with government, actively putting forward solutions.
Sarah Green is regional director of CBI North East