CBI Publishes Wish-List For British Industry

"Balance and growth". These are the words that perhaps best describe the CBI's blueprint for steering Britain's economy back on the right track. During a press conference at the industry body's Centre Point HQ Deputy-Director General, John Cridland, and Chief Economic Adviser, Ian McCafferty, outlined their organisation's recommendations to the UK government's pre-budget report.

The proposals although largely predictable- no increased tax burden on businesses, and a more timely balancing of the nation's budget- arguably read more like a fanciful Christmas wish-list than a letter to the Chancellor. They included calls for the government to protect capital spending, and a re-working of public services.

The latter represents an ambitious (some would say audacious) plan to cut the cost of public sector service delivery and increase efficiency by using private sector methods. The CBI was quick to point out the disparity in public sector investment and productivity levels when compared to the private sector, but such direct comparisons do call into question as to how far an institution such as the CBI truly understands the public sector.

The recommendations most likely to have UK businesses leaders' ears prick-up were saved until last. These were the short-term steps the CBI feels the government must take to ease the pressure on firms and boost business investment and jobs.

These included:

• A continuation and improvement of the Research and Development (R&D) tax credit scheme. The CBI were at pains to emphasise the importance of foreign investment in the form of R&D and high-tech industries. Pointing its finger at the UK's uncompetitive tax-system in comparison to countries like Ireland, the CBI insist relaxation of the tax system and improvement of tax credits within R&D are essential for Britain to remain attractive to foreign companies.
• Increasing support for SMEs to raise capital and cash flow. Making equity raising a tax deductible -- essentially not punishing businesses for taking risks -- is deemed crucial by the CBI if companies are to be undeterred in their spending. Should the CBI have its way, the cost of raising equity would be viewed as no different to any other business exspense. This is clearly something that most figures in the corporate world would gladly welcome.
• A reconsideration of planned business tax increases in areas such as National Insurance, landfill tax and the rise in VAT. Here the CBI has set its sights on upcoming taxes it considers likely to have a deterimental effect on businesses including taxes on landfill, pension contributions, rates and the scheduled rise in VAT.