The CBI today reacted to the Chancellor’s Pre-Budget Report
Richard Lambert, CBI Director-General, said:
“There were two tests for this Pre-Budget report. First, would it increase the credibility of Government plans to restore the public finances? Second, would it be a platform for job creation and economic growth? The Government has failed on both counts.
“The Chancellor has made a serious mistake imposing an extra jobs tax at a time when the economic recovery will still be fragile. Increasing National Insurance contributions will hold back job creation and growth.
“He has also missed the opportunity to increase the UK’s credibility by reducing the public deficit earlier. The Government still needs to set out fuller plans on how it will reduce public expenditure.”
On bankers’ bonuses:
Mr Lambert said:
“A headline-grabbing tax on bankers’ bonuses may have populist appeal, but the Government needs to take care not to put the UK’s financial services sector at a comparative disadvantage internationally. The threat of an exodus of talent is real.”
On measures to support small and medium-sized businesses:
“There are a number of measures which will give small and medium-sized firms breathing space at a critical time.
“Delaying the planned rise in smaller companies’ corporation tax is welcome. Extending the Time to Pay scheme will give small and medium-sized firms longer to spread tax payments, while the extension of the Enterprise Finance Guarantee Scheme will help smaller firms obtain the credit they need to operate. We had also been calling for empty property relief to be extended.”
On public sector pensions and pay:
“We applaud the Government’s courage in beginning to tackle the thorny issues of public sector pensions and pay, but it is only a start.”
On measures to promote the shift to a low-carbon economy:
“This is an encouraging package to support companies as they seek to exploit new low-carbon opportunities.
“By committing to support four Carbon Capture and Storage demonstration plants, the Government is increasing the UK’s chances of success in getting this transformative technology off the ground.
“The introduction of a boiler scrappage scheme is a sensible way of encouraging households to replace older models with more efficient ones. But with much of the UK’s housing stock to retrofit with new boilers and loft insulation there is still a long way to go to plug the energy efficiency gap.”
On pensions:
“Increasing the tax that some people will pay on their pensions savings worsens the regrettable change announced in the last Budget. It will spark a flight of high earners from pensions, and so reduce senior management involvement with corporate pension schemes.”
On intellectual property:
“The new lower 10p rate of corporation tax for patents originating from the UK will spur on innovation among the UK’s research-intensive companies.”