The Daily Telegraph: UK faces death by taxes , say City chiefs

Daily Telegraph, The (London, England) - Saturday, December 3, 2005
Author: AMBROSE EVANS-PRITCHARD
BRITAIN is shooting up the global tax league and faces long-term decline unless the Government changes tack, a group of 60 top business leaders and academics warns today.

In a joint letter to The Daily Telegraph, the group urges Gordon Brown to halt the tax squeeze before it does any more damage to economic competitiveness.

"Britain's taxes are rising and becoming more complex whilst our competitors are heading in the opposite direction,'' it says. Spain, Italy, Denmark and Canada are all slashing the tax burden.

"In 2000, 20 out of 30 major countries in the OECD had a higher corporation tax than Britain. Now only 10 do - and they are mostly in the eurozone.''

The letter was signed by Sir Anthony Bamford, the JCB tycoon known for cordial relations with Labour. He lent his house in Barbados to Tony Blair this August for a three-week family holiday.

The list of names included Sir Tom Cowie, president of the bus company Arriva; Lord Kalms, president of Dixons; Sir Rocco Forte, chairman of Rocco Forte Hotels; John W Leavesley of the Leavesley property empire; and David Ord, managing director of the Bristol Port Company.

Chris Kelly, head of Keltruck heavy vehicles and one of signatories, said firms were buckling under extra fees and red tape. "I don't know how on earth anybody can start a business faced with this morass of regulation,'' he said.

David Shaw, chairman of Sabrelance Corporate Partners, said Labour had "lost the plot''. "Everywhere you look, Labour is adding extra burdens, on top of all their stealth taxes . Within five years we'll see serious problems in Britain,'' he said.

Britain's corporation tax is 30pc, compared with Estonia (0pc), Ireland (12.5pc), Switzerland (24.1pc), Slovakia (19pc), Hungary (16pc) and Austria (25pc). These figures do not capture the domino effect as eastern Europe's low- tax revolution sweeps west, prompting rethink in Poland, Germany and Greece.

OECD figures show that Britain's government spending will reach 45.2pc of GDP in 2006, up from 40.2pc in 1998 - and five points above the average of rich states. This is just below "high- tax '' Germany, whose figure may soon undercut the UK.

Andrew Allum, head of consultants LEK, said Gordon Brown had pushed the tax burden beyond the tolerance threshold. "We could get it down by 8pc to 10pc of GDP by slashing wasteful spending,'' he said.

COMMENT

Firms have lost patience with a government that treats industry as a cash cow for an ever-growing bureaucracy. In eight years, Britain has switched from a low- tax to a high- tax country, as others slash taxes to compete. If it continues on this destructive course, we will within five years be back where we were in the 1970s: the sick man of Europe.