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Monday, 11 November, 2002, 06:56 GMT
Business chiefs fire tax broadside
Digby Jones
The CBI's Digby Jones takes the government to task
The Confederation of British Industry, the UK's biggest business lobby, has warned the government that high taxes are holding back British companies.

In a letter to Chancellor Gordon Brown, CBI director general Digby Jones called on Monday for tax restraint, saying that businesses have been hit by "relentless and damaging" rise in corporate levies.

The CBI estimated that tax rises brought in since the Labour government came to power in 1997 will have cost British firms 47bn by 2005.

When the cost of complying with a raft of new business regulations brought in by Labour is factored in, the total cost to UK companies could rise to 15bn a year, the CBI has calculated.

"Where taxes go from here could be the biggest test yet of the government's pro-business credentials," Mr Jones said.

Hard times

"Ministers cannot keep siphoning off company funds without damaging investment productivity and competitiveness."

He urged the government to make up any shortfall in its revenues through extra borrowing rather than new taxes.

The CBI's strongly worded warning comes amid falling business investment and weakening economic growth, and foreshadows Mr Brown's annual pre-Budget report, due out later this month.

The organisation has been one of the most vociferous critics of the Labour government's record on business taxes and red tape.

It has protested particularly strongly against taxes, such as national insurance contributions, which are administered by employers through the company payroll.

Rival business lobby the Institute of Directors is also planning to plead for a halt to higher taxes ahead of the pre-Budget report.

"Now is the time to take stock, step back, and stabilise the current system," said the IoD's head of policy Ruth Lea.

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Digby Jones, Director General CBI
"It's incredibly difficult to do business in Britain"

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