CBI backs business-friendly Budget

Head of business lobbying organisation lays out how he thinks today's Budget will help UK businesses

The CBI has come out in strong support of today's Budget, arguing that the tax cuts and red tape reductions laid out by Chancellor George Osborne make it a business-friendly package.

"This Budget will help businesses grow and create jobs," said CBI director-general John Cridland (pictured). "The Chancellor has made clear the UK is open for business."

Specifically, here's what Cridland had to say on the following areas:

On business regulation:

"The Government's commitment to reducing red tape will increase the amount of time that managers spend growing the business and creating jobs. The moratorium on new legislation will be welcomed by smaller firms. The Government should think small first when it comes to making employment law - if it works for the smallest firms, then it works for businesses of all sizes."

On support for growing businesses and smaller firms:

"Widening the scope of the Enterprise Investment Scheme will bridge the funding gap for small and medium-sized businesses, and could unleash a new wave of finance for the most entrepreneurial firms.

"Doubling the lifetime limit on entrepreneurs' relief within Capital Gains Tax will encourage them to keep on innovating and growing their businesses, as well as providing much-needed investment for start-ups.

"Increasing the SME Research & Development tax rate will make the UK a more attractive place to invest, reducing the cost of doing R&D by a quarter by 2012-13."

On enterprise zones:

"The new enterprise zones could provide positive incentives for local authorities to promote development, allowing the Government to carry out a real-time experiment on what actually works as a spur to economic activity."

On improving our skills base:

"Increased funding for apprenticeships is good news, but employers also need bureaucracy to be cut to encourage take up.

"More University Technical Colleges will support high-quality learning, boosting the number of science and maths graduates that businesses really need.

"More work placements will raise employability skills amongst young people."

On business taxes:

"The extra 1p cut in corporation tax will help firms increase investment. Meanwhile, significant changes to entrepreneurs' taxation will rightly focus much-needed support on businesses with growth potential.

"Measures to increase the certainty of the tax treatment of foreign profits increase UK tax competitiveness. The agreed effective rate for overseas group financing will make the UK a more attractive location for multinational businesses.

"Businesses will be encouraged by the confirmation that the 50p top tax rate, which deters internationally-mobile talent, is only temporary. We look forward to further details of when it will be removed.

"The reduction in excise duty and the postponement of the escalator will be welcome at a time when businesses and consumers are facing such sharp increases in fuel costs. However, the £2bn windfall tax on North Sea oil and gas, which has been levied to pay for this, creates uncertainty for future investment and hits a sector which already pays a significant amount of total tax.

"The banking levy is an additional cost to doing business in the UK, so it is important that international agreements are put in place quickly to avoid banks paying double taxation and to ensure that the UK remains an attractive global financial centre.

"The proposed simplification of National Insurance represents a significant improvement, increasing the transparency of the tax system, removing loopholes and reducing compliance costs."