Chancellor Alistair Darling has acknowledged businesses' opposition to the government's contentious capital gains tax (CGT) reforms and revealed that he will outline his final decision over the plans within weeks. Dan Martin reports.
Admitting that his proposals were "controversial", Darling claimed he would shortly unveil the outcome of the various discussions held with business groups since his pre-budget report in October.
"I am listening to what you've got to say and I will report to Parliament within the next three weeks," he said during a speech at the Conference of British Industry's (CBI) annual conference in London.
Although hinting that concessions are still possible by saying he was "open to suggestions" of alternatives, Darling defended the introduction of the rules which would push entrepreneurs' tax bills up by 80% when selling a business.
"Capital gains like any other profits ultimately come from the strength of the economy so I believe it's right and fair that they pay their share in tax as a contribution to the economy's future strength," he said.
"But because we want to reward investment we are right to tax gains lower than income and the new single rate is amongst the most competitive in the world. It's less than half the top rate for income and less than half what it was 10 years ago.
"It's also right to make the system more straightforward and sustainable for the tax that is easier to comply with."
Darling's words however were critised by conference delegates. Steve Sharratt, chairman of the CBI's SME Council, said the government's enterprise policy was "in tatters" and called on the chancellor to completely reverse his plans.
But refusing to confirm whether he would be moved on CGT, Darling responded saying that the Labour Party had created a decade of economic stability craved by companies during the 1990s.
"There are many more businesses now than there were 10 years ago. That demonstrates our intent and ability to act on enterprise," he added.
Links:
[1] http://www.businesszone.co.uk