A weekly round-up of tax stories from the national press...

BUSINESS

The Conservatives have accused the prime minister of making false claims about the number of businesses given Government help with their tax bills.

Independent & Telegraph

The Conservatives have pointed out that while £5 billion in tax has been postponed, this is in respect of 160,000 businesses, many of which have been able to make multiple agreements. Gordon Brown said the number of firms was nearer 300,000, suggesting he had been looking at the number of agreements.

Alistair Darling has warned that Conservative plans to press ahead with a banking tax, to claw back some of the billions of taxpayer funds spent bailing out the financial sector, would pose 'a hell of a risk' to City jobs unless it had international support.
Guardian, Telegraph & Financial Times 22.3.10; Financial Times 24.3.10


This looks like a case of extracting the maximum amount of feathers with the minimum amount of hissing from the goose. Banks are an easy and popular target for a levy of some description. The only question is whether going alone on this, as the Conservatives suggest, would mean the goose flies south to sunnier and less heavily taxed climes. International action as proposed by Labour would presumably make alternative destinations less attractive.

The chairman of Lloyd's of London, Peter Levene, has called for lower taxes to stem the exodus of insurance companies to offshore centres.
Guardian 25.3.10

Every industry will say it is a special case for tax cuts. However, in the current economic climate, neither party has said it is prepared to reduce income tax. The general election may see the Conservatives saying they will cut corporation tax (and pay for the reduction by cutting other allowances), but Labour has made no such promises.

CORPORATION TAX
Multinationals are paying 'much more tax' to resolve cross-border disputes, according to HMRC.
Financial Times 22.3.10

HMRC’s focus on transfer pricing issues is paying off, according to the department, because it carries out stringent checks ensuring companies are dealing with transfer pricing correctly.




GENERAL
Higher-rate taxpayers and older people are being urged to claim their share of hundreds of millions of pounds of overpaid tax and missed reliefs, ahead of a shortening in the time limit for tax refunds.
Financial Times 20.3.10

Hopefully, practitioners will, as a matter of course, have ensured their clients have claimed all the reliefs and repayments to which they are entitled. This might be an opportunity to remind clients of the shortened deadlines, particularly for 2004/05 and 2005/06, just in case any reliefs have been overlooked.   

Labour is likely to backtrack on plans to implement a so-called death tax to pay for long-term care, saying the party will not introduce any definitive final reform in the next parliament.
Guardian 22.3.10

Having already been burnt on this issue, Labour would probably prefer to seek a cross-party approach to the problem of paying for long-term care. This will not happen during the run-up to the general election, when parties will seek to emphasise the differences between them.

Tax inspectors are for the first time to get wide-ranging powers to open people’s post without their permission.
Telegraph 26.3.10

This measure is aimed at smuggled goods, not taxpayers’ general mail.

INCOME TAX

Tax relief on donations to UK charities are being extended to some organisations in the European Union, Norway and Iceland.
Financial Times 25.3.10

This is to be retrospective, in that donations made after 27 January 2009 (the date of the ECJ judgment in Porsche, which is the reason for extending gift relief) may also be considered for relief. It may be worth making protective claims for clients who made relevant donations. 

Personal allowances will be frozen at their current rate despite inflation growing at 3%, in move widely criticised as a stealth tax.
Telegraph & Independent 25.3.10

Although widely reported, this story is nonsense. Personal allowances are announced in the pre-Budget report, and the baseline is uprating in line with September RPI. In September 2009, RPI was 1.4% negative, so leaving personal allowances unchanged was an increase in real terms. For 2008/09, allowances were increased by 7.3%, based on a 5% RPI figure in September 2008 and a further addition as part of the 10% tax rate abolition debacle. By the time of the Budget in 2009, RPI had turned negative, but the same politicians and newspapers did not call for the personal allowance increase to be reversed.

Ten million middle income households are worse off under the changes made to the tax system by Labour since 1997, but the incomes of the poorest have been improved.
Guardian & Telegraph 26.3.10

These are the findings of a report from the Institute for Fiscal Studies. They will not be a surprise, given Labour’s policies, which are designed to improve the lot of the lower-paid.

The Treasury faces a wave of demands from international sports stars that they be exempt from tax when they compete in the UK, to match the tax waiver announced in the Budget for foreign-based footballers playing in next year's Champions League final at Wembley.
Financial Times 26.3.10

International sportsmen and women, other than footballers, may feel discriminated against as only the latter may be exempt from income tax when they play in the UK.

INHERITANCE TAX

Thousands more Britons face paying inheritance tax after the Chancellor announced that he would not increase the level at which the levy is payable for the next four years.
Telegraph & Independent 25.3.10

A relatively small number of estates have to pay inheritance tax; while freezing the annual exemption will increase this number, it is unlikely to cause the Chancellor sleepless nights given Labour’s attitude is that the wealthiest percentage of the nation is not the party’s priority in terms of tax cuts.

INTERNATIONAL (no comment, just news)The French government will abandon its plan to introduce a carbon tax on domestic energy and road fuels unless there is agreement on a European Union-wide levy.
Financial Times, Guardian & Telegraph 24.3.10
Bulgaria plans to introduce a tax on the rich and put a limit on public salaries as it battles a deepening recession and tries to keep down its fiscal deficit.
Guardian [not online] 22.3.10

The German government is to introduce a tax on large lenders that indulge in high-risk investment behaviour, such as proprietary trading.
Times 23.3.10
Credit Suisse has severely restricted travel to Germany by private bankers working for rich German clients with accounts in Switzerland, amid fears that such employees could be detained by tax authorities across the border.
Financial Times 22.3.10
Chile's new conservative government plans to introduce 'moderate' tax rises to help rebuild the country after last month's earthquake and tsunami, according to finance minister Felipe Larraín.
Financial Times 24.3.10

INVESTMENTS
Wealthy investors seeking to beat the rise in the top rate of tax to 50% on 6 April have sparked a last-minute rush for tax-efficient venture capital trusts.
Times 21.3.10
…so the promoters of several leading VCTs say in an article appearing in a weekend money supplement, in which such companies advertise regularly. No doubt the freedom from tax on the returns has proved to be even more attractive with the prospect of a 50% tax rate, but it would be unwise to read too much into such assertions.

The Tories have backed business protests at Government plans to include complex cuts to pension tax relief for high-earners in the pre-election Finance Bill
Financial Times 22.3.10

Tax experts and pensions organisations say the proposed new rules relating to higher-rate tax relief for pension contributions are unworkable and complex. However, there has been no indication the Chancellor is prepared to give way on this because higher-rate taxpayers are not his current priority. 

NATIONAL INSURANCE
David Cameron will make a firm general election pledge to halt next year's planned rise in National Insurance contributions for workers and companies, according to senior Conservative sources.
Independent, & Times 26.3.10

The party cannot guarantee to make such move given the UK needs all the tax revenues it can get.

STAMP DUTYThe UK has missed out on £90 million in tax revenue from corporate takeovers in the past two years as an increasing number of companies have used a 'scheme of arrangement' structure to avoid paying stamp duty on their purchases.
Telegraph 22.3.10
 

Stamp duty avoidance schemes must be reported to HMRC under the disclosure of tax avoidance scheme rules. If the Revenue can close down a scheme, it will do so.


A Conservative government would not reverse the stamp duty increase or most of the other tax rises unveiled in the Budget, senior Tories have said.
Financial Times 25.3.10
Until the UK’s fiscal state improves, the Government both now and after the election will be keen to collect all the tax it can get into its coffers.

     


     
 

Going for Growth - Extracts from Lord Mandelson’s speech to The Work Foundation

This week marks the start of a new decade in which we know the economy will come under fiercer competitive challenge than ever before, as the world tilts further east towards China and the other emerging economies.

But we do not have to resign ourselves to relative economic decline. On the contrary.
In Britain we still have one of the best environments in the world for starting and growing a new business.
We are emerging from the financial crisis and the downturn with our key industrial strengths intact, unlike our experience in previous recessions.
The competitive value of the pound is helping exports and increasing the sourcing of manufactured goods in the UK. And the Government will maintain its support for the economy through existing public spending and investment until the recovery is firmly locked in.
But that’s not the end of the story. The recovery is only the beginning of how we are going to pay our way in the global economy and create the jobs of the future.

As the Government will explain in the strategy for economic growth we are publishing tomorrow, how we create future jobs won’t be the same as in the past. We will turn new technologies into jobs, like those in digital and biotechnologies. We will commercialise the output of our hugely successful science and research base. We will turn low carbon into business and employment opportunities.

None of this is going to happen with government simply standing on the sidelines. Other governments are actively investing in their industrial strength. We have to do the same.

And it won’t happen if we take the wrong turn in sorting out the national finances in the coming months.

Two plans

So a credible Deficit Reduction Plan has to be accompanied by an equally credible Growth Plan. Deficit reduction is a three-sided triangle: spending reductions, tax increases and economic growth, and, of the three, growth is the best antidote to debt both in short term and the long term.

December’s PBR has a clear objective – to halve the deficit by 2013-14. It is bold and tough: the equivalent of something approaching an £80 billion turnaround in the public finances. This is the sharpest reduction in the budget deficit for any G7 country. This is vital for credibility, vital for attracting inward investment.

Our social priorities in health, schools and policing are protected. But, as the Prime Minister and the Chancellor have both made clear, the impact on other services cannot be painless.

Our plans do not at this stage fix rigid limits for each department, for the good reason that future uncertainties remain. But the commitment to real reductions is clear.

The politics of growth

You can see the last thirty years as a series of steps and mis-steps towards this economic goal; shaped sometimes by ideology, sometimes by pragmatism, increasingly by the realities of globalization.

The 1980s saw the timely privatization of industries that were long overdue for return to the commercial sector. Industrial relations underwent a sea change. The quality of management in our best firms improved, and with it, corporate profitability.

But, there was also soaring unemployment and social divisions. And other long-standing weaknesses in UK economic performance were becoming chronic: an indifference to manufacturing; neglect of science, engineering, technology and skills; lack of a long-termist business culture; and an education system that paid scant attention to the needs of employment.

British business still suffers from too large a tail of poor management and low productivity and the financial crisis demonstrated that the long-termist business culture needs to be more firmly established. There is a debate within business on business models, especially the reliance on debt over equity.

We need a politics of long termism over short termism.

Of a smarter, more effective and affordable state.

Of a return to the values of hard work, enterprise, corporate stewardship and mutual commitment over those of dodging responsibility, making a fast buck, and putting self before others.

Of working together as a nation to address the shared challenges of the future, not social divisiveness or outdated ideological obsessions about the State or doing away with government.

We need a dynamic economy and society, but we also need to understand that while people want opportunity, they also want security for themselves and their families in a fast changing world.

There are significant strengths for Britain which give us a base that makes the new challenges easier to address.

The UK research base has benefited from a doubling of the Government’s investment in science.

Our universities are now fully part of the way we earn our living in the world: attracting 230,000 fee-paying overseas students and generating £59billion a year for the UK economy – more than 2% of GDP.

There has been a renaissance of major UK cities – a genuine end to the psychological cycle of decline that blighted the late eighties. This has been led by public-private investment in which the Regional Development Agencies have played a major role.

Although it has not grown at the rate of the rest of the economy, the British manufacturing sector did not in fact contract in absolute terms in the decade before the recession – its output in both value and volume has remained stable despite the fiercest imaginable competition.

The resilience and reinvention has been helped by flexible labour markets which in this period became culturally embedded in the private sector.

It is this factor, together with the scale of the fight-back mounted by the government and the strength of our welfare-to-work system, that has helped keep people in jobs and limit the effects of the global recession.

But it is also clear – and I want to be honest about this - that the global economic crisis has exposed structural problems in all developed economies, including the British economy that we did not entirely foresee or deal with in the years of uninterrupted growth.

No-one fully understood the risks in the model that destroyed Lehman Bros and crashed the banking system.

And let me say this quite bluntly. For the past decade we allowed ourselves to become over-dependent on the City and financial services for growth and our tax revenues. That is why, without wishing the financial sector to be smaller, we need other industrial strengths and sources of revenue to grow faster.

And finance will have to change – the insurance bill for saving the economy from the status quo was far too steep and it can never happen again. While putting the City in an iron cage of regulation is undesirable, just relying on a bit of nudge here and there will not suffice.

The document we will be releasing tomorrow sets out the Government’s plans for growth. It sets out what we have done since I launched the New Industry New Jobs agenda last spring and described the Government’s further work programme for the coming months. It is work in progress. We are in a marathon, not a sprint. But it defines an agenda for a very challenging future, and a new approach to investing in our basic capacities for growth.

Today I want to highlight some of the key themes of that work programme and say something about where we need to go with each.

Enterprise

First and foremost we need to foster a new climate for enterprise in Britain. There is no substitute for this - no substitute for the drive and ambition that it brings. It can sometimes be a touch ruthless and raw. But it is the single most important engine of economic progress. The recovery cannot be driven by consumer debt or public spending. It will be driven by private sector investment and private enterprise.

Enterprise and reward go hand in hand. Much as it shocked many of my friends when I said I was comfortable with people making themselves “filthy rich”, in the context I was speaking I was simply stating a simple truth: that enterprise and effort should be rewarded. It sets goals to spur people and brings gains to us all. And it is often forgotten that I added the important rider “as long as people pay their fair share of taxes”.

I would also add now that pay and performance must go together. That means long term sustainable performance. In this case, there is no need for government to intervene. We are not interested in capping salaries for the genuinely successful.

Where pay and performance do not correlate, the whole notion of value breaks down. And if remuneration is actively driving systemic risk, and that risk cannot be confined to a single institution, then we have a real problem.

Of course given the tax rises on the better off imposed in the past year, tax is inevitably once again a hot topic of debate in the business community. Setting tax rates for me has always been a matter of striking the right balance, not of ideology. In a difficult fiscal environment no credible government can rule out the need to raise taxes. And we haven’t shirked from taking those tough decisions over the past year.

But there is never a case for punitive taxation. There is never a case for rates of tax that remove the incentive to self-improvement or to build a business. Britain retains one of the most favourable tax regimes in the world for entrepreneurs who start a successful business and eventually sell part of their stake.

Our 18% capital gains tax rate is among the lowest in the world and our corporation tax rate among the lowest in the G7. A competitive tax environment is something we must preserve.

As for the new top income tax rate, I believe that is justified in the quite exceptional circumstances we face.

It is right that in taking the tough decisions on tax needed to combat the deficit those with the broadest shoulders will bear the greatest burden. I believe we have got this balance right.

But as a Government we will always be vigilant that this burden does not become so great that it damages our long-term competiveness or inhibits those whose efforts will help us build sustainable growth.

At the same time we need to accept that the current structure of most public companies is better at rewarding enterprise in senior management or owners than it is at giving the bulk of the workforce an incentive to innovate or commit to the business. The evidence is that companies that share rewards with their employees, like the John Lewis Partnership, are also very good at pursuing long term growth strategies.

Innovation

Second, we need to renew our focus on what makes us successful innovators. A decade of sustained investment by this government has rescued British science from its desperate straits in the 90s and secured its position of global excellence, second only to the United States. Our challenge is to transform more of that knowledge into economic gain. To get more D out of our R and D.

In productivity terms we spent the late twentieth century trying to catch up with the US. Now Asia is racing to catch up with us. We did well in the American century. We can take little for granted in the Asian century.

Our 21st century economic growth needs to be built on innovation at the knowledge frontier, addressing new challenges such as climate change and decarbonisation and exploiting new digital and materials technologies.

For this reason, it is vitally important to preserve our research capabilities even through a period of increased constraint on investment. Our universities must focus on research that offers the greatest economic potential, prioritise excellence, develop partnerships with industry, specialise around their core strengths and not be afraid to develop distinctive missions.

For each region of the country, I am asking the Chair of the Regional Development Agency to present me with a report by mid- March, prepared in conjunction with their Vice Chancellors, on how their universities, supported by RDAs, can drive economic growth in their area.

In the PBR, to boost innovation, the Government supported the concept of a “Patent Box” that ring fences commercial revenues from patents and secures favourable tax treatment for them. This complements the incentives we have for research in the UK through the R&D tax credit.

Since I launched our policy framework New Industry New Jobs, we have earmarked almost a billion pounds in the last year for investment in British capabilities in cutting edge technologies like plastic electronics, composites, wave energy and industrial biotechnology. We will be publishing the next stage of our plans for the further development of key sectors – including construction, business services and homeland security - by the end of March.

Over recent years we have built up the basic skeleton of an industrial innovation system in the UK. We have the rapidly growing outreach of our universities into business, RDA investment in innovation centres, the setting up and expansion of the Technology Strategy Board, and the recent decisions to establish industrial centres of excellence in a range of technologies including civil nuclear engineering and industrial biotechnology in Yorkshire, and plastic electronics in County Durham.

Our challenge now is to build and consolidate that innovation landscape into something like the Fraunhofer network in Germany which actively connects industry and the German research base. With this objective in mind I have asked technology entrepreneur Hermann Hauser to undertake an urgent but systematic evaluation of the UK’s existing Innovation network to see how Britain can best emulate the outcomes of the Fraunhofer model.

Finally, innovation depends on skilled people. We have set out plans for the creation of a new British technician class, in part through a dramatic expansion of Advanced Apprenticeships. This will fill a longstanding gap in the British skills market.

These proposals have been well received but we need to focus on implementation. I have asked Lord Sainsbury to report to me by the end of March on the development of the registration system for engineers and proposals to introduce a parallel scheme for science technicians that will make this new technician status a reality.

Finance for growth

My third theme concerns the way we finance this enterprise and innovation. Enterprising and innovative companies need investment to grow, but there is strong evidence that UK financial markets have for some time not served some growing British companies well. The credit crisis has exacerbated this problem by dramatically reducing the banking system’s appetite for risk. We need to keep up pressure on banks to lend, but we also need to look for wider solutions, both at the British and the European level.

For a decade we have tentatively been experimenting with public-private solutions to the growth capital problem. It is clear that Britain needs coherent solutions at a different scale. We need a new range of public- private financial instruments to step into the historical equity gap and the breach created by the banking system’s reduced appetite for commercial risk.

That is what the Innovation Investment Fund launched last year will in part do – it has already more than doubled its initial £150 million public investment with private funds and its professional independent fund managers will make their first investments this year.

At the same time the Rowlands Review has explored the issue of growth capital for business and the feasibility of re-creating a successful fund like the old ICFC or 3i. So we are working with banks to establish a new growth capital fund which will invest in established UK SMEs who are seeking between £2 and £10 million to develop their business.

In parallel the RDAs are establishing a number of new public private financial vehicles with the help of European funding and the EIB, which will invest in businesses seeking less than £2m.

These will sit alongside existing smaller venture capital funds established over the last 10 years.

I am therefore now asking Mervyn Davies to report to me urgently on what might be done to give this network maximum coherence and reach. My aim is to create an industrial investment network with a strong regional capacity.

Infrastructure

Fourth, over the next ten years Britain will need a transformative wave of private investment in digital, energy, transport and low carbon infrastructure, totalling hundreds of billions of pounds.

We have two challenges here. First, how we get these high cost, long term investments made. The public purse isn’t going to be able to fund them, so we need to get the conditions and incentives right for private sector investors. Second, we need to make sure that these massive programmes create opportunities for British-based industry. Britain’s supply chain only too often has a habit of missing these opportunities. This time has to be different.

We are implementing plans to stimulate investment in the infrastructure for digital communications. They will extend broadband access to every home and business in Britain in just a few years and extend next generation broadband beyond where the market alone will build it to serve 90% of the population.

And are developing strategies on renewable energy, rail electrification, low carbon vehicles and the charging infrastructure for electric cars, putting in place what only Government can – clear frameworks of policy within which the private sector can take commercial decisions

We have begun a shift in the basic remit of the regulatory agencies so that they focus on the need to renew our infrastructure and adapt it to a low carbon future.

In the transition to low carbon energy and transport, emissions trading and a carbon price potentially provide strong stable investment incentives. Initial experience though has been disappointing. The need now is to look urgently at the options for ensuring we have a carbon price that is more stable and truly reflects the environmental costs.

And we need to examine how the role of pension funds to be major investors in the long term infrastructure projects of the future.

Infrastructure UK has been tasked with producing a full assessment of the scale of the challenge, and to produce creative ideas for how to meet it. Getting this right will be one of the most important ways of securing the country’s future prosperity. We all need to engage with Paul Skinner as he draws up his report in the coming months.

We need equal vigour in tackling the parallel challenge of making sure that British-based firms are ready for the opportunities this wave of investment will create.

Government bodies like the Office for Nuclear Development and the Office for Renewable Energy Deployment need to work intensively with British-based companies to anticipate and compete for the supply chain opportunities from huge shifts to alternative energy or transport infrastructure.

By the time the call for tender arrives, these firms should understand the opportunities, understand the capacities they will require, and understand the help Government can provide in helping them develop those strengths.

That’s exactly what we are doing now for example in the civil nuclear sector through the Nuclear Advanced Manufacturing Centre and our work to develop the nuclear supply chain to serve the growing nuclear industry in the UK.

Long termism vs short-termism

Finally, we need to start a debate about how we build a stronger culture of long term commitment to sustainable company growth in this country, based on a strong compact between institutional shareholders and the corporate sector.

On one hand we need a system that enables shareholders to discipline poor management. But we also need to give management some scope to plan and build without the excessive demands for quick returns that characterise too much modern public company ownership.

I don’t have any easy answers. Our reforms of company law made clear the importance of directors taking a long term view. At the same time we have empowered shareholders. We are now evaluating whether this has changed behaviour in the board room – and among investors.

Chris Hogg has played a key role in this debate with his review of corporate governance, and it is time for Britain to take a long hard look at the questions he and others have raised. I attach the highest importance to the new Investor Code and will be meeting investors and companies next week in the run up to the further consultation by the Financial Reporting Council.

Takeovers provide a very clear test here - for all involved. Companies making acquisitions should set out transparently and publicly their long term plans for the assets they propose to acquire, including company headquarters, R&D sites and main plants. Although these remain commercial decisions, firms or investors should expect to brave the court of public opinion if they are motivated only by short term profit.

Surely investment managers should be judged on their long term growth and profitability, not their short term performance – and the same goes for CEOs. How many strategic and effective managers are being hobbled with the quarterly race to please the beauty contest of the markets?

Conclusion

Only by growing our economy can decent jobs be created, living standards protected, and the winners’ circle expanded outward to those on low and middle incomes.

We have learnt the right lessons from the downturn and will sustain the recovery. But the key question is how we can achieve a step-change in the growth rate of the British economy in the decade ahead.

Suffering From Falling Sales - What To Do About It

Falling sales, declining sales, reduced sales, slumped sales or decreasing sales. No matter which term you prefer to use the understanding remains the same. That is your business needs to sell more of its services or products in order to improve turnover and profitability. Without sales most business would cease to exist. The ongoing priority of every business should be to increase sales no matter what the economic climate is.




Many people start out in business with a passion to bringing a concept, idea, a service or a product to market. It then dawns on them that the only way to do this is by selling whatever it is they are offering. No matter how good they are their business will only succeed if they are able to sell their concept, product or services to others.



At Accountants, Business & Tax Consultants – Holden Associates, we firmly believe “that selling should benefit the buyer more than the seller”. The first step in increasing sales should therefore be a change in perception about the sales process. Changing your perception of the selling process will go a long way towards building up a loyal clientele. A good starting point is to view your business from the customer’s perception.



It is also important to take the time to understand the market segment which you are operating in. Simply saying “you are selling to everyone”, will not provide you with sufficient business intelligence to improve your sales.



Here are some simple tips to get you started on the road towards improving your sales:-



· There should be a match between whatever it is you are selling and your customer. An ill fitting match will not result in repeated sales.



· Find out what are the needs or constraints in your customers mind when they are buying.



· What is it that motivates customers to buy from you?



· Use insightful questions to help the customer decide.



· Try to meet the wider needs of the customers – customers do not usually know what it is they would like to purchase straight away.



· Customers will always need help to evaluate and make a final decision. Be seen as an expert in your industry.



· Find out who, when and how a final decision to purchase will be made.



· If an appointment needs to be made. Make sure it is made with the person that is the decision maker.



Finally let your personality shine through, be a genuine, professional and enthusiastic sales person. Show your customers that you are interested in helping them. If you do not offer whatever it is they are looking for do not be afraid to say so. Do not be afraid to refer them on to someone who can meet their requirements. The chances are – that customer will always remember you. It is also more than likely that they will tell other people about you. There is no better way to receive free advertising. Successful selling goes beyond receiving payment. Strive to become an enabler of good outcomes – customers will always return to buy from you.

Let business fuel the recovery, government told

Businesses must be given the freedom to create jobs and to drive the economy, a leading business group has said.




The British Chambers of Commerce (BCC) has set out its plans for economic recovery in a manifesto aimed at the political party conference season.



The BCC manifesto, which details a series of business policies for the next Parliament, argues that the next government faces three fundamental economic challenges: tackling the legacy of the deepest recession in decades, reining in public spending, and identifying future sources of economic growth and jobs.



To meet the challenge, the BCC has called on the government to avoid more tax and regulatory obstacles. The manifesto says that any new employment legislation will distract firms from their main task of creating wealth for the economy and proposes a moratorium on new employment law. The planned 2011 rise in National Insurance increase should also be scrapped, with the BCC declaring it a tax on jobs.



The BCC also wants to see a rebuilding of the UK’s infrastructure. Although public finances are under severe pressure at the moment, the BCC is backing new spending on essential infrastructure projects. The government, the manifesto proposes, cannot just look at ring-fencing health spending, when it is investment in transport, IT and energy that will drive productivity and recovery.



A third core plank of the BCC manifesto involves a rebalancing of the economy. Rather than relying on financial services and the public sector to fuel the recovery, there must be a stronger focus on international trade and enterprise in both manufacturing and services. According to a recent BCC survey, just 31 per cent of companies exported last year, a proportion the business group described as too low.



David Frost, the BCC’s director general, said: “The UK’s 4.5 million private businesses, not the public sector, will lead this country’s economic recovery.



“To make this happen, future governments – from whatever party – must focus on rebuilding our infrastructure, simplifying and reducing the red tape burden, and promoting overseas trade. The BCC will work with government to achieve these aims – and to deliver the economic growth we all want to see.”