Digby Jones, the director-general of the CBI, centred his attack on the government’s proposed climate change levy to be implemented in April 2002. In a BBC Radio interview Jones claimed the tax would be anti-productive and difficult to implement.
He said UK businesspeople were already struggling to compete against a weak euro and the levy, aimed at reducing carbon dioxide emissions, was ‘inept’ and difficult to implement. Jones called for an increase in the number of exporting manufacturers scheduled to receive discounts on the new levy.
The government defended the proposed levy saying it would be revenue-neutral with the money raised being used to reduce National Insurance contributions.
The CBI’s challenge to the government’s tax plans follows its call for policymakers to put investment at the top of the political agenda as a way to lessen the effects of a predicted global economic slowdown.
As part of the CBI’s New Year’s address, Jones said: ‘Economists predict that world economic growth will slow from 4.5% in 2000 to around 3.5% in 2001.
‘That makes it vital for 2001 to be a year of investment. The government must offer more incentives to invest in new equipment and innovative business opportunities. It must deliver the infrastructure and skilled workforce needed to keep the UK high up the world investment league table.’
To counter the ‘hard landing’ and prevent long-term problems, Jones said the CBI would lobby the government to invest heavily in transport infrastructure and make sure it follows through on its 10-year transport plans, which include £180bn in public and private investment.
Jones said investment in transport, education and training were vital if Britain wished to remain competitive as a business-friendly location.
Other measures the CBI plan to lobby the government on include providing incentives for small businesses, extending tax credit for investment in research and development to all companies and extend capital allowances for growing businesses.
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