PracticePeople In PracticePortillo slams Blair on e-business

Portillo slams Blair on e-business

Shadow chancellor Michael Portillo has hit out at the government's e-business policy yesterday accusing it of increasing the tax burden and wrapping the new economy in red tape.

Speaking at a Net Group reception for e-business in London, attended by e-business professionals representing UK blue chip companies, he laid into Tony Blair, accusing him of using press stunts to display his e-friendliness, whilst quietly bringing in new e-taxes.

Portillo said that Britain doesn’t need Blair’s warm words or new taxes, such as IR35, the tax on IT entrepreneurs, BN2J, the tax that encourages big businesses to locate anywhere other than Britain, and national insurance on share options.

‘To encourage ebusiness to prosper in Britain, we must establish an investor-friendly climate. That means low tax and light regulation,’ he said, ‘but we’re going in the wrong direction. The tax burden is up. Red tape is up. This is a big risk to take when businesses of the new economy can simply get up and go overseas.’

Attacking the government for past sluggishness on ebusiness, Portillo accused it of dragging its feet over selecting the right person to become an e-envoy, and not acting quickly enough on e-signatures.

‘So far we’ve had heavy-handed regulation where a light touch is needed, and undue delay where speed is of the essence. Whitehall committees can’t keep pace with an economy where business takes place at a touch of a button,’ he said.

A DTI spokesperson said: ‘It sounds like Portillo has picked up a very old briefing. The tax burden is falling, and is lower than it was under the last government. Last year it was 37.4%. This year it is 37%, and next year it will be 36.8%.’

On the subject of red tape, he said: ‘The latest OECD report showed that the UK had the lowest amount of regulation in OECD countries.’

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