Sunday, October 28

That's not nice Darling.

In response to the Pre-Budget Report, by the Prime Minister's puppet Chancellor Alistair Darling and the announcement of firm plans to raise the Capital gains Tax threshold from 10 to 18 per cent, four of the country’s business organisations – from the Confederation of British Industry (CBI), British Chambers of Commerce (BCC) Institute of Directors, and the Federation of Small Businesses (FSB) – have come together to challenge the decision.

In a meeting with Mr. Darling last week the representative group urged him - which is in practice all they can do - to scrap the huge 80 per cent increase. At the meeting ''he agreed to give it consideration'', which is of course quite meaningless. David Frost, Director General of the British Chambers of Commerce, said in a press release after the meeting:

“The Chancellor can now be in no doubt of the views of business towards the changes he made to Capital Gains Tax in the pre-budget report. The Chancellor has agreed to work with business on measures to stimulate enterprise in the UK and seek ways to find a way forward on the issue of CGT.”

John Wright, FSB National Chairman, (and a former NEC Member of The Militant Trade Union NALGO) in his press release reflected the comment of the BCC adding: “This was a constructive meeting and we hope that there is scope for a compromise that will meet the aims of the Government without damaging the many entrepreneurs across the country. The current proposals to change taper relief on capital gains tax go in the wrong direction and need to be changed.”

Fine placatory words from these two gentlemen, which together with other media comments will raise the issue in the minds of business people but will have no effect on any significant change to Darling's plans. It is all too little and too late the Chancellor's latest tax hike is all but a done deal.

A piece in The Times, introduced the hope that the Chancellor has left the door open to alternatives; though there is actually little sign of any evidence to that effect. This is confirmed by HM Treasury which has denied any reversal on the proposed policy, and Mr. Darling has insisted in a Treasury communication that he will not back down; the change in CGT will raise an extra £900 million a year. So much for his ''consideration''.

In a letter to the Chancellor last week regarding the proposal which will see small businesses and investors facing almost double the amount of Capital Gains Tax come next April, Richard Lambert, Director General at CBI, said it “undermines the 10 year effort by this government to promote enterprise and risk-taking within the UK” and will “hold back investment”. Which to say the least is something of a very British understatement.

Only when the present or any future occupant of 11 Downing Street asks his senior advisors how will the representatives of the nations business community react to the latest tax wheeze and worries about their response will any really effective direct pressure (forget lobbying) have had an effect. In the mean time all that is happening, as the media reports, is that representatives of the business organizations are merely responding - not reacting - to the latest government erected barrier to business growth.

For over 20 years the business community has suffered the well documented accumulative effect of increased regulation, interference and tax. Time is now right for direct action; it can only get worse. Placatory words abound as to how the burden of less regulation can be applied to businesses, but detailed examination shows that in reality UK businesses have in fact been further inhibited by government.

The time is approaching when Businesses, should perhaps follow the example of the Trade Union movement when furthering their cause by direct action a Tax strike could eventually be the answer!

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