From the CBI to the IoD, what Britain’s business organisations want out of George Osborne’s mini-budget
Business organisations have drafted their wish lists ahead of the chancellor’s autumn statement, which has morphed into a mini budget. Find out who wants what.
Confederation of British Industry
The CBI has called on the chancellor to stick to the course on deficit reduction, but to do more to drive growth. It says the government should get the business bank up and running as soon as possible, and warns against a reduction in pension tax relief. Lowering the threshold below £50,000 is not a wealth tax – it’s an income tax which would hit swathes of middle-income earners and small business owners, the CBI argues.
Measures it’s calling for include: local government spending on road maintenance, incentivising take-up of the Green Deal, capping business rates at 2% in 2013, a new capital allowance incentive for infrastructure investment, and scrapping stamp duty on Aim shares to encourage investment in medium-sized businesses.
British Chambers of Commerce
The BCC calls 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”.
Other measures it calls for include the implementation of a £100m ‘growth voucher’ scheme for 20,000 businesses; an ‘export voucher’ scheme; a new ‘unblocking fund’ for stalled construction developments; and an increase in the building target of the Homes and Communities Agency by a further 100,000 houses.
The BCC suggests these measures could be paid for by: reforming national insurance contributions for people who stay in work beyond state pension age to raise £400m a year; rolling child benefit into the tax credits system and the Universal Credit (from 2014) to save up to £2.4bn a year; means-tested winter fuel allowances which could save £1.7bn a year; and postponing up-rating of working-age tax credits and benefits, which could save £2bn a year.
EEF manufacturers’ organisation
Access to finance: the EEF calls for an immediate review to increase competition in SME banking including full account number portability, a switching incentive, lowering barriers to new entrants and the merits of an earlier referral of SME banking to the Competition Commission. It also wants a review of the feasibility of a bank or network of regional banks capitalised by the public sector.
Tax and investment: a time-limited 100% first year capital allowance for two years.
Infrastructure: a re-allocation of the £5.3bn underspend by government departments in 2011-12 towards investment in infrastructure.
British Bankers’ Association
The BBA recommends a 100% capital allowance for a limited period of two years; extending the capital gains tax holiday under the Seed Enterprise Investment Scheme for another year. It wants the newly established business bank to help simplify and clarify existing funding to firms in one brand umbrella and thinks it can be used to play a clearing house role. To encourage exports, the BBC recommends ensuring that the provision of short-term trade finance receives appropriate capital treatment.
Council of Mortgage Lenders
It calls for the extension of New Buy beyond its original timeframe of two years and more incentives to stimulate housebuilding; and hopes the Support for Mortgage Interest scheme will be retained at the current more generous levels. It also wants housing benefit under the Universal Credit system to be paid directly to landlords rather than tenants to prevent the accrual of rent arrears.
Association of Convenience Stores (represents local shops)
Calls on the chancellor to focus on the cost of business rates and banking. On business rates, reviewing how business rate increases are calculated and introducing a cap on all future increases at a maximum of 2%; postponing the decision to delay the 2015 revaluation until a full impact analysis can be undertaken and introducing new legislation to allow councils to raise revenue from retail businesses operating large out-of0town car parks to fund rate discounts and other investments in town centres.
On lending, ACS recommends a review of the impact of everyday retail banking practices, such as service charges should be conducted, to understand how these are affecting small business growth.
Institute of Directors
The IoD calls on the government to implement the Davies Commission’s recommendations for new airport capacity; to ensure going green is done at the lowest possible cost by prioritising gas in the short term, rather than over-subsidising more expensive renewables; and to unlock private-sector investment in infrastructure and re-allocate a portion of government spending from current to capital while staying within “plan A”. It also wants a complete overhaul of the tax system with a flat 30% income tax rate, the taxation of profits when they are distributed, at a flat 30% rate and the abolition of capital gains tax. It urges the government to consider a time-limited increase in the rate of capital allowances on new investment in plant and machinery and to freeze road fuel duty and air passenger duty rates in cash terms. It also wants the government to establish a tax regime to encourage the development of shale gas (which is expected in next year’s budget).
County Homesearch Company
Start infrastructure and construction projects like improvements to the Dartford Tunnel Crossing; government support for 25-year fixed rate mortgages; stamp duty to be transferred from the buyer to the seller; first-time buyers should have to pay no stamp duty up to £300,000; cap legal fees on house purchases; speed up planning permission; tax empty shops and homes.