Business tax rate cuts would ease the burden of high fuel prices

The government was adding to the costs of running a business through stealth taxes being introduced under the guise of anti-avoidance measures, it said.

In its recommendations to Chancellor Gordon Brown ahead of next week's Budget it called for tax cuts.

In response, the Treasury said UK firms did not face high barriers to business.

Low investment

The CBI said that business was funding a disproportionate share of public spending.

It is hardly surprising that business investment has hit a record low John Cridland, CBI

The cumulative effect of post-1997 business tax rises was expected to hit �80bn by 2010, the business body warned.

"It is hardly surprising that business investment has hit a record low," said CBI deputy director-general John Cridland.

"The problem for government is that lower investment by firms spells lower growth and prosperity, and eats into the very wealthy which public services depend on for funding over the long term."

Stability

Business leaders called for a major business tax rate to be cut in Chancellor Brown's Budget.

It suggested a lower corporation tax rate or a reversal of the 2002 increase in National Insurance contributions paid by employers.

In response to the CBI's submission, the Treasury pointed out that since 1997 the government had cut corporation tax from 33% to 30%, to its lowest ever rate.