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Tuesday, 23 April, 2002, 05:13 GMT 06:13 UK
New taxes turn business mood sour
Patricia Hewitt (left), David Blunkett, Kenneth Clarke
Speakers to the conference include Patricia Hewitt, David Blunkett, and Ken Clarke
test hellotest
by Myles Neligan
BBC News Online reporter at the BCC Conference
line

Company bosses, angered by Budget tax rises, have given a stormy reception to government ministers attending one of the key meetings in the UK business calendar.

Delegates at the annual conference of British Chambers of Commerce, the UK's second-biggest businesses lobby, have warned the government that they would not tolerate any further increases in taxes.


Gordon Brown is bashing business to gain popularity

Mike Smith, Lewis Spring Holdings
"We now have to live with these tax increases, but we say to the chancellor, there is no coming back for more, whether openly or stealthily," BCC president Anthony Goldstone told the conference.

The comments followed announcements by Chancellor Gordon Brown in last week's Budget of measures which would see businesses shouldering much of the cost of investment in the National Health Service.

Government speakers to the conference, which ends on Tuesday, include Education Secretary Estelle Morris, Trade Secretary Patricia Hewitt and Home Secretary David Blunkett.

NHS reform

Budget measures would see employers' national insurance contributions rising in order to help raise cash for the UK's ailing NHS.

Employee contributions are also due to go up.

Mr Goldstone said that increases in health spending must be accompanied by reforms aimed at making the health service more cost-efficient.

"There is no point simply pouring our money into a bottomless pit," he said.

Safe economy?

Conference delegates said the tax increases could damage the Labour government's hard-won reputation for economic competence.

"The view that the economy is safe with Labour has been open to question because of the issue of regulation," Charles Rose, director of consulting group Abermil, told BBC News Online.

"It is now further in question. (The Budget) will prove destabilising."

Mike Smith, chairman of Midlands-based manufacturer Lewis Spring Holdings, told BBC News Online.

"A lot of people had huge sympathy for the incoming Labour government, but that has been squeezed and squeezed and squeezed. (Gordon Brown) has totally ignored manufacturing.

"He's bashing business to gain popularity."

Conservative view

Conservative leader Iain Duncan Smith capitalised on the mood of discontent, telling delegates that the tax rises had "clobbered" business.

"Increasing national insurance contributions is an outright tax on jobs for (employers)," Mr Duncan Smith said.

"It is a cowardly and insidious way to put up income taxes."

He added that the higher employee contributions were likely to fuel demands for wage increases, adding further to business costs.

Rising costs

The BCC conference comments follow a chorus of criticism from business leaders over the Budget.

Digby Jones, head of the BCC's larger rival the Confederation of British Industry, said on Sunday that the new tax regime would hit businesses with an estimated �4bn in extra costs a year.

However, Mr Goldstone acknowledged that improvements to the health service would help businesses by reducing sickness absence, which currently costs employers an estimated �10bn a year.

His comments contrasted with a post-Budget statement last week from former BCC chief executive David Lennan, who said that businesses should not have to contribute towards NHS costs because they do not use NHS services.

Mr Lennan was ousted from his post late last week.

See also:

19 Apr 02 | Business
BCC pledges 'business as usual'
19 Apr 02 | Business
BCC boss: 'I've been sacked'
28 Mar 01 | Business
BCC delegates go home happy
22 Apr 02 | Business
Hewitt defends tax rise
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