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CBI mulls Lib Dems tax ideas

Alan — Sat, 17 Apr 2010 02:27:56 +0000

The shadow Chancellor for the Lib Dems, Vince Cable, has come out on top of the polls as the best leader that can be trusted to help guide Britain out of the recession. At the same time however, he also heavily criticized the party’s current policies on bank reform, transport, energy, tax, employment law, reform of the takeover rules, and the minimum wage.

Deputy Director General of the CBI, John Cridland stated that when it comes to rebuilding public finances the Lib Dems do have many useful details on how they could bring credibility back to the UK financial system and that they are committed to reforming the pensions of the public sector.

Despite the positives in the Lib Dem plan, Cridland stated that they also have many flaws in their proposals such as the idea to raise capital gains tax alongside income taxes which he described as a ‘damaging plan’ that would likely not offer any recognition or reward to SMEs and entrepreneurs.

He continued to say that the plan to break up the banks in Britain would not serve any purpose and that allowing the state to issue a public interest veto on foreign takeovers would be a disaster.

Also unimpressed was the Institute of Directors with Miles Templeman the director general of the organization commenting that while there are a few portions of the Lib Dem proposals that would help forward the business agenda, most of these positive ideas would be overruled by proposals that would prevent the growth of business.

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Financial services industry recovering

Alan — Fri, 02 Apr 2010 01:39:39 +0000

The financial services industry of Britain is slowly starting to come back from the banking crisis with profits starting to consistently rise and companies starting to feel as if growth will occur largely over the year of 2010. However, the volumes are still flat which may mean that the improvement in profits is the result of cost cutting and better efficiency instead of actual new business.

A new report from PricewaterhouseCoopers and the CBI outlines concern that there is too much legislative burn on the industry, and that to stay in compliance businesses will be forced to spend much more.

The chief economic advisor of the CBI, Ian McCafferty, stated that the financial services sector should show steady signs of activity in the next three months and continue to grow stronger, but the long term outlook is still somewhat fuzzy.

Lending fell to companies although it increased to private individuals at the same time that building societies saw an influx in business and banking fell.

The report also stated that most financial service companies are hoping that lending will start to increase among their customer base in the next quarter which will help them become profitable and lift up their business volumes.

At the same time, regulation fears will continue to dampen growth outlooks over the course of the year ahead as companies will be forced to spend more simply to stay in compliance with the new legislation which makes the future a bit hazier to industry experts.

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Mandelson attacks CBI

Alan — Fri, 02 Apr 2010 01:35:39 +0000

Business secretary Lord Mandelson launched a bitter attack yesterday on Richard Lambert the director of the CBI stating that he preferred to side with big time banks and was out of touch with SMEs.

The attack is the first argument that has occurred between the CBI and Mandelson who generally has a good relationship with the CBI. In turn, the CBI has been supportive of his work at bringing back UK manufacturing to its former glory.

The spat may mark a sign of deteriorating relations between business and Labour in the final days before the General Election occurs.

The rampage was triggered by post budget comments made by Lambert in which he said that plans for a ‘Credit Adjudicator’ were not going to work. The plan was aimed at creating a body that could intervene if companies found that banks were rejecting loan applications without significant reason.

Lambert said that the idea was dotty and will never actually happen because it is political nonsense.

Upon hearing his comments, Mandelson was furious and said that the view was a betrayal to SMEs that are receiving poor treatment from banks and need help before they are pushed in redundancy.

He continued to say that the indifference shown by Lambert was both shameful and shocking and that he is alone if his plan is to desert small businesses at a time when they need support. According to Mandelson the government is behind small businesses and is seeking the proper avenue for them to be heard.

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CBI wants plan for balanced budget

Alan — Fri, 12 Mar 2010 07:08:52 +0000

Business leaders are pushing the government to develop a plan that will balance the public finances by the year 2016 when is two years earlier than originally planned.

The CBI believes that this target date could be reached if spending is lowered overall and the public sector underwent reform. The organization claims that the government has used tax rises to try and reduce the public finance deficit which has done more damage than goof and wants the plans for an increase in employers’ National Insurance contributions to be abolished.

According to the CBI, going ahead with the increase in contributions would have a taxing effect on employment levels and is ‘ill-advised.’ It is also pushing for Chancellor Alistair Darling to make use of his last Budget before the general election in order to detail Whitehall department spending plans so that a higher level of economic stability is reached.

Director of the CBI, Richard Lambert, wrote a letter to Darling that suggested the UK fiscal credibility and economic growth fostering should be the primary concerns of the soon to be announced budget.

Lambert wrote that the Government needs to start laying a pathway that is credible towards balancing the deficit because while investors abroad are worried about the debt, they will give the UK a break up until the election takes place.

Other suggestions made by the CBI include one that if public money were spent in a better fashion over £130bn could be saved every year.

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