Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

UK employers, stung by new levies, call for overhaul of tax and regulation

Published 09/12/2021, 07:21 PM
Updated 09/13/2021, 10:21 AM
© Reuters. FILE PHOTO: People walk across London Bridge during morning rush hour, in London, Britain, June 11, 2021. REUTERS/Henry Nicholls

© Reuters. FILE PHOTO: People walk across London Bridge during morning rush hour, in London, Britain, June 11, 2021. REUTERS/Henry Nicholls

By William Schomberg

LONDON (Reuters) -British businesses demanded that finance minister Rishi Sunak stop raising their taxes and instead offer more help to meet the challenges of Brexit, COVID-19 and climate change when he makes major budget statements next month.

The Confederation of British Industry urged Sunak to "flip business taxation on its head" when he sets out new tax proposals and a three-year spending plan on Oct. 27.

"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," CBI Director General Tony Danker said in a speech at Alliance Manchester Business School.

Danker told Sunak to stop hitting companies that invest in making their premises less carbon-intensive with increased property tax payments, a quirk of the business rates system.

He also said more needed to be done to boost skills training, speed up the development of new infrastructure projects such as Britain's delayed high-speed railway and rewrite market rules to attract more private investment.

"Traditional UK regulation - and this is not without controversy - has always prioritised competition and consumer price. Those things remain vital, but the pendulum has surely swung too far when the UK is bottom of the league table for investment," he said.

Britain's government should help create new markets -- as it had with regulation around offshore wind turbines -- and enable businesses to reinvest profits in innovation, he said.

The CBI and other employer groups protested last week that jobs would be lost after the government said it would increase social security contributions to fund social and health care.

That followed March's announcement of a big increase in corporation tax from 2023 to help fix the hole in Britain's public finances left by Sunak's 350 billion-pound ($485 billion) spending response to the coronavirus pandemic.

"I am deeply worried the government thinks that taxing business - perhaps more politically palatable - is without consequence to growth," Danker said.

As well as next month's budget announcements, Sunak and Prime Minister Boris Johnson are due to discuss investment plans with business leaders and institutional investors in October.

British productivity levels have been more than 20% lower than those in the United States, France and Germany for the past two decades. Business investment has also lagged behind those three countries every year since at least 2000, according to the Organisation for Economic Cooperation and Development.

© Reuters. FILE PHOTO: Workers walk to work during the morning rush hour in the financial district of Canary Wharf in London, Britain, January 26, 2017.  REUTERS/Eddie Keogh

Danker said a two-year tax break introduced this year by Sunak to spur businesses investment would simply bring forward investment planned for later years and was limited in scope.

($1 = 0.7209 pounds)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.