The Confederation of British Industry (CBI) has warned the Government that the country’s economic recovery is being put at risk by what they describe as Chancellor George Osborne’s ‘tax assault’ on UK business.
According to the new Director-General [DG] of the CBI, Carolyn Fairbairn, recent initiatives in Mr Osborne’s Budgets have placed a £9bn a year burden on UK businesses and economic growth could be threatened if the Chancellor increases the costs to business further in his Budget next month.
Speaking at the publication of the CBI’s official pre-budget submission, the DG claimed that the new National Living Wage and the apprenticeship levy, both of which come into effect in April, will have cost UK business £29bn by 2020.
While the group’s members say they can tolerate the existing burden, they have reached a tipping point on levies, which threatens investment decisions and growth plans. They are also concerned about the cost and impact of business rates, which the CBI believes should be reformed.
According to Ms Fairbairn, a reform to business rates would help regenerate town centres and also help to stimulate economic growth. She added that the CBI supports the Chancellor’s aim to reduce the deficit over the cycle, but believes that the best way to achieve this is to go for growth, to which a reform of business rates would contribute.
The business group also believes that more frequent valuations of commercial premises would be a big step forward and called on the Government to rate properties using the consumer prices measure of inflation rather than the retail prices index (RPI), which is no longer considered an official statistic. Meanwhile, it wants the UK’s smallest businesses to be exempt from the tax altogether.