BusinessCompany NewsChris Moncrieff – the corridors of power…

Chris Moncrieff - the corridors of power...

Labour, with Tony Blair at the helm and Gordon Brown resident at the Treasury, have just completed five years in government. And where does that leave British business?

Well, the business community would not greet that question with a rapturous appraisal of the benefits that they hoped to have accrued to over that period.

Indeed, you are more likely to be fixed by a jaundiced eye than anything else. Because the government, for all its talk about enterprise and developing a competition, in reality burdened business, in particular internationally exposed companies, with a series of tax increases and extra bureaucracy.

And while business was hoping for better things in last month’s Budget, the real bombshell was the realisation that the much-discussed hike in national insurance contributions would not, after all, be confined to individuals.

This increase is being seen as a tax on employment by raising wage costs and forcing employers to review the number of people they engage.

This comes, as industrialists reflect on the end of five years during which the government has caused business to pay an additional £29bn in tax.

Digby Jones, director general of the CBI, has pointed out that this provides the ingredients necessary for an anti-competitive cocktail.

The way this has hit companies is shown in figures which reveal that among our top five trading partners, the UK has one of the highest tax burdens, at 13.2% GDP.

‘It is no wonder that Britain has fallen from ninth to 19th in the world competitiveness scoreboard over the last four years,’ says shadow chancellor Michael Howard.

It would be harsh to say that the government has used business as its whipping boy, but Martin Temple, director-general of the Engineering Employers’ Federation, has come close to saying that.

‘They think that business is politically a soft touch,’ he says. ‘They think business can’t bite back.’ We shall see.

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