The Confederation of British Industry (CBI) has argued the case for a business bank, and warned against any reduction in pension tax relief.
Outlining the CBI’s reservations over introducing pension’s tax relief in his letter to Mr Osborne, John Cridland CBE Director-General, wrote:
“Lowering the threshold below £50,000 is not a wealth tax – it’s an income tax which would hit swathes of middle-income earners.
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“This would hit small business owners who invested heavily in their companies in the early years so back-load pension contributions to the end of their working lives, particularly hard. It would also be a major blow to professionals saving in defined benefit schemes – like senior nurses, retail store managers or gas engineers – who get a pay rise or a promotion.
“Reducing the tax free limit would fly in the face of the Government’s efforts to encourage more people to save adequately for their retirement, and its drive to position the UK as a world-leading business investment location.”
On the deficit reduction plan and growth, Mr Cridland, said:
“The CBI fully supports the deficit reduction plan. This is critical for the UK to keep the confidence of international markets.
“However, the government does have additional resources available – it underspent by £7.8bn last year and will receive a windfall of up to £4bn from the 4G spectrum auction next year.
“We believe around £1.5bn of this resource should be targeted on short-term, high-impact measures to support growth. These include local government spending on road maintenance, a new capital allowance incentive for infrastructure investment and scrapping stamp duty on AIM shares.”
The British Chambers of Commerce (BCC) has stressed the Chancellor’s Autumn Statement must “pull out all the stops” to enable British businesses to access new markets, invest and create jobs.
The organisation has called for effective measures to support growth, job creation, exports, investment, and business confidence, such as the delivery of key infrastructure projects across the UK and the creation of a business bank that “heralds a radical and long-term change in the way that companies access finance”.
BCC Director General, John Longworth, said:
“The Chancellor’s Autumn Statement must include tough decisions to prioritise growth, without adverse effects on the government’s deficit reduction programme.
“We believe that resources need to be re-prioritised to support business growth, international commerce, and the building of houses and infrastructure here at home.
“Our message to the Chancellor is clear. Business will lead Britain’s economic recovery, but needs targeted support and a confidence boost from Government.
“Ministers must be bold and take some unpopular decisions, including a shift of resources from welfare spending towards crucial growth measures.”
The Federation of Small Businesses (FSB) has urged the Chancellor to use his Autumn Statement to put a firm plan in place for small firms to grow, which can be fully delivered at Budget 2013.
Largely, its demands include setting out plans for a small business bank, an extension to the National Insurance Contributions Holiday scheme, and the planned 3p fuel duty rise to be scrapped.
John Walker, National Chairman, Federation of Small Businesses, said:
“This is a very important statement from the Chancellor. At the half-way point of the parliament, the government will be judged on its actions. There is no argument that they’ve had a tough economic backdrop to work with, but small firms are still feeling the pressure, so need a clear plan for growth to get them back on track is needed.
“Small business policymaking has been subject to a range of confusing patchwork approaches that have often had minimal impact on the ground. We want to see a clear plan of action from the Chancellor which he can take forward to Budget 2013, which will detail the long-term support small firms need. Key to this is going to be the small business bank and eventually how it can become the Small Business Administration supporting small businesses over the long-term.”
