Today, the Confederation of British Industry calls on the government to halt the “relentless and damaging” rise in business taxes, which will cost firms an additional £47 billion between 1997 and 2005.
It also publishes its submission to Chancellor Gordon Brown ahead of his pre-Budget report, due out later this month. Protecting the UK's competitive position in the world is the most strongly-worded statement the CBI has submitted to this Chancellor.
The CBI says the rising tax burden has contributed substantially to a squeeze on corporate finances, along with the build up of regulation and sluggish economic growth. Firms would have been £30 billion better off during the last year had profits risen since 1996-97 in line with GDP, a shortfall that is hitting investment and employment across the economy.
Manufacturing has been particularly badly hit with profitability falling 11% between the start of 1998 and end of last year, double the decline in the 1990s recession. The CBI believes we are now almost certain to see the first calendar year decline in business investment for nearly a decade. As Digby Jones, CBI director-general, points out, the rise in the business tax take is larger than the GDP of Wales.
“Ministers cannot keep siphoning off company funds without damaging investment and competitiveness,” he says. “The Chancellor is leading firms into battle on productivity but wrongly weighing them down with an increasing tax burden. Where taxes go from here could be the biggest test yet of the government's pro-business credentials.”
The cost is out of control – it could reach £15bn a year – and the mortgage industry will not escape. If anything, the added cost of compliance to cope with regulation come Mortgage Day could force some firms to close.
Which is why it is so important that you become as involved as possible with regulatory developments as and when they come out of the FSA. Indeed, today, November 11, is the last day for you to respond to CP146. CP98 attracted a mere 19 responses. But already, as Mortgage Strategy went to press on Friday last week, the FSA had received more than that amount. And last week our website www.mortgagestrategy.co.uk registered nearly 4,000 section visits and almost 500 copies of our CP146 response template were downloaded.
It is crucial that you respond to CP146. Download your response and tell the FSA today.