CBI relieved but wary about pre-budget report

The CBI says business will be “relieved but wary” about the measures announced in the pre-budget report.

CBI chief Digby Jones says: “There will be relief that Mr Brown has not sought to ratchet up further the business tax burden, which is doing so much to damage competitiveness.

“The increase in the number of small businesses eligible for the zero rate of tax is welcome. But we will remain on guard for signs of further tax surprises in the next Budget.

“The Chancellor was right to increase borrowing rather than taxes.

“The Treasury forecasts for GDP growth always looked over-optimistic. Mr Brown was also right to deliver a tough message on public sector pay.

“He must not lose the government&#39s reputation for economic management to appease militant trade unionists in the public sector.”

On green taxes, he says: “It is good news that Mr Brown has not jumped the gun and gone straight for an increase. I am very pleased that he has listened to business and will consult before a further tax move. Green taxes too often damage competitiveness with little environmental benefit.

“Waste reduction is a big challenge but the proportion of industrial and commercial waste going to landfill has already fallen by a third in recent years. Business has shown it wants to improve the environment but firms remain to be convinced of the need to increase the landfill tax by £3 per ton.”

On business insurance he adds: “It is encouraging news the government has taken action as the rise in costs is damaging thousands of firms. But while the Competition Commission and others deliberate, many companies will suffer.

“We are disappointed that Mr Brown did not take immediate action by returning the £300m windfall.”

And on the abolition of North Sea oil royalties, he adds: “This is a belated but welcome move. North Sea competitiveness remains a key issue in a global oil market.”