CBI: Budget not what UK business needs
March 23rd 2006

Gordon Brown's budget fell short of the much needed boost to UK competitiveness, according to the CBI.

"The chancellor slapped himself on the back but did little to help hard-pressed businesses currently under the cosh," said CBI director- general, Sir Digby Jones.

"Steps to reduce red tape, expand R&D tax credits and boost UK Trade & Investment have our wholehearted support. But business will be disappointed the the opportunity to truly improve UK competitiveness has been lost. UK firms have watched while other countries have reduced business taxes to help their companies compete in this era of globalisation. Yet the UK continues to do the opposite."

However, he said elements of the budget, such as simplification of the corporate tax system and the extension of R&D tax credit for firms of up to 500 staff were welcome.

Commenting on environmental measures included in the budget, Jones said emphasis on promoting new technologies was positive. However, with UK manufacturers struggling with major energy price hikes not borne by continental rivals, he declared the increased Climate Change Levy - which will be linked to inflation from next year - a "sting in the tail".

"The increase in the climate change levy (CCL) rates in line with inflation from

2007 will provide a significant additional burden for manufacturers on top of

rapidly rising energy prices. We have seen little evidence to support claims

that the CCL has been effective in delivering emissions reductions in the

commercial business sector. The Climate Change Agreements (CCAs), in contrast,

have been effective in achieving emissions reductions and we welcome the

extension of the CCAs to heat treatment, calcium carbonate, compressed gases and kaolinitic clay sectors," CBI senior policy advisor, Gillian Simmonds told IP&E.

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