Business split over Queen’s Speech

Britain’s businesses have warned that the Queen’s speech fell short of expectations on tax, skills and spending.

Corporate leaders and lobby groups bemoaned the lack of a bill designed to prevent tax dodging by large firms.

Experts also warned about the Government’s five-year ‘ tax lock’ on individuals – where it pledges not to raise income tax, Vat or national insurance – could lead to a rise in so- called stealth taxes, and cuts to tax rebates.

the Conservative Government has pledged to drive growth by cutting red tape and reducing the country’s deficit.

But simon Walker, the director general of the institute of Directors, said: ‘ Good intentions are nothing without delivery, and companies will be looking to the Business secretary to spell out exactly where he will find £10bn worth of cuts to regulation.’

tim Walford- Fitzgerald f rom chartered accountants HW Fisher & Co warned that the tax lock ‘could be easily picked’.

He said: ‘the much-vaunted fiveyear tax lock is not as straightforward as it looks. Freezing rates doesn’t mean a zero increase in the burden from income tax, Vat and national insurance.’

But alex Henderson, tax partner at PwC, said that it was a ‘ bold move’ t hat would r esult in ‘less chopping and changing on tax’ for firms. He added: ‘the lock means the Government has less flexibility.’

Despite receiving a warm recep- tion from groups such as the CBi, some business chiefs warned about the impact the Government’s policies would have on skills.

alistair Cox, chief executive of Britain’s biggest recruiter Hays, a £2.2bn FtsE 250 firm, said anything that prevented firms’ ability to recruit the best brains to come to the United Kingdom ‘will have lasting consequences for our country’s future prospects’.

He said: ‘World-class economies are based on world-class talent.

‘if Britain is to compete successfully on a global scale, British business must have unfettered access to that talent, wherever it resides.

‘Given the UK’s skills gap, skilled migration is, quite simply, the only way for businesses to support i mmediate growth plans and fill roles that would otherwise remain vacant.’

the hard-hitting rebuke was backed up by other groups.

Chris Cummings, the boss of square Mile l obby group the CityUK, claimed that Britain needs ‘ a properly skilled workforce with immigration policies that support t he competitiveness of UK businesses’.

the lack of a bill aimed at reducing tax dodging by multinational firms – a move that had been expected – was also criticised.

Christine allen, policy director at Christian aid, said that she was disappointed by the lack of legislation on the issue.

she said: ‘More than 70,000 people have supported the campaign for a bill, which we estimate would raise around £3.6bn in the UK.’ the Government has pledged to rake in a total of £5bn by cracking down on illegal tax evasion and aggressive tax avoidance, which is within the law but considered immoral.

Barry Johnston, head of advocacy at actionaid which fights poverty and injustice, said: ‘We remain in the dark as to how the Chancellor will recover the £5bn he plans to get from clamping down on tax dodging.’ He added: ‘Eighty-five per cent of the public are opposed to tax avoidance, and the Conservative Party’s manifesto promised that the UK would “lead international efforts to ensure global companies pay their fair share in tax”.

‘the Government has a strong mandate to act on this issue so the absence of any mention today will come as a surprise to many.’