Tax blamed for 'unattractive' investment climate

TAX is among the primary factors deterring companies from investing in the UK, according to a new report.

The CBI has called for an end to the 50p personal tax rate and lower business levies, saying the commitment to cut corporation tax to 23% is "welcome", but the government should aim for 18% in the long term.

It claimed investment will play a critical role in the economic recovery, plugging the yawning void of muted public and consumer spending, but warns "the UK's reputation as a good place to invest is under threat".

The study, entitled Making the UK the best place to invest, canvassed 400 companies. It calls for government to allow private provision of public services, accelerate moves towards a low-carbon economy and ramp up provision of high-speed broadband.

Director-general John Cridland said: "With competition for international capital so fierce, the government must play up our strengths and remove the stumbling blocks to investment. Time isn't on our side and we have less than five years to turn things around."