Tax the key in battle for business vote


The British Chambers of Commerce (BCC) will today call on the political parties to make a firm commitment ruling out any future business tax rises in the next Parliament.

Following continued speculation, businesses are fearful of damaging tax rises after the General Election according to a new BCC survey.

Of 550 business leaders who took part in the BCC General Election Survey, nine out of 10 said they were worried future tax increases will have a damaging impact on their firms.

The survey comes on the day that Chancellor Gordon Brown and Leader of the Opposition Michael Howard address BCC delegates on what is being dubbed the "business day" of the General Election campaign.

Speaking in advance of the Conference, BCC President Bill Midgley, said that taxation was one of the biggest issues of concern.

"The continuing debate over whether taxes will have to rise under a future Government is a major worry and employers now need a firm commitment that business taxes will not go up.

"In recent years, businesses have had to contend with rising National Insurance contributions, which have simply increased the cost of employing people. On top of these costs and other higher indirect taxes, the continued speculation about the future of business rates only serves to increase business fears.

"A future government should strongly resist any call to return the setting of business rates to local authority control."

Midgley also reiterated concerns about the rising burden of regulation, skill shortages, congestion and rising pension costs.

But nevertheless, he said that he would support Labour in the coming election as long as Gordon Brown remained Chancellor.

"He has an understanding of what business needs and where business comes from," Midgley said.

He said that he would not support the Conservatives because "if I had a concern it is that they do not have the experienced ministers in place".

Meanwhile, 63 senior business figures also gave Labour their support in an open letter to the Financial Times, saying that "Labour has presided over a period of economic stability and growth unprecedented in modern times".

Signatories included Carphone Warhouse boss Charles Dunstone, Amstrad chairman Sir Alan Sugar, ITV chief executive Charles Allen and Allied Domeq chairman Sir Gerry Robinson.

But many small business owners take a different view. A survey published last week found that while the small business community agree that Gordon Brown has delivered economic stability, three-quarters feel the government does not understand their needs and four out of 10 are not able to name a single benefit that the Labour government has brought to their business.

A Mori poll of 200 UK finance directors carried out for the Financial Times earlier this month also found that half believe the Conservatives have the best policies for business, against fewer than a quarter (23 per cent) for Labour and a mere four per cent for the Liberal Democrats.

Only four per cent of those questioned for the poll believed that the government's tax and regulation policies encouraged business expansion, while half also said that they discouraged enterprise.