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Business reaction to the Queen's Speech. By Dan Martin

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15th Nov 2006
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Business and accountancy groups have given a mixed reaction to today's Queen's Speech which outlined the legislative measures for the coming parliamentary session.

Climate Change Bill

Richard Lambert, director general, Confederation of British Industry:

"This bill is welcome evidence that the Government is serious about tackling climate change. Now all concerned need to work together to ensure that the policy framework is effective and does not undermine competitiveness. We support the case to underpin the 2050 target with intermediate milestones - but the Government is right to reject the case for annual targets which would be unworkable."

David Frost, director general, British Chambers of Commerce:

Business supports attempts to tackle climate change but UK competitiveness can not be put at risk. Taxing businesses more to trade in the UK will merely force businesses abroad and do nothing to tackle global warning. The recent BCC Energy Efficiency Survey discovered that business wants to ‘go green’ but needs more assistance in doing so.

Business welcomes the growing consensus that Britain should be the world leader in setting challenging targets in carbon emissions trading but business needs two things;

1. Financial framework from government which supports new energy efficient technologies.
2. Fair competition which means at the very least a carbon emissions trading scheme which doesn't impose greater costs in carbon emissions trading in the UK than it does in other countries.

Jane Milne, head of property insurance, Association of British Insurers:

“Climate change is one of the biggest challenges that Britain, and the world, faces. We support the Government’s plans to set targets and establish the Carbon Committee to give advice on reducing carbon emissions, but firm action is needed too.

“Climate change means, amongst other things, that the risk of flooding will increase. Managing the risk will enable flood insurance to remain widely available. Urgent action is needed here – we believe that Government spending on flood defences needs to increase by 10% a year to £750 million by 2011 to deal with that risk.”

Carol Undy, national chairman, Federation of Small Businesses:

“Small firms recognise the need to protect the environment. A healthy economy will generate funds that can then be invested in research and development on cleaner ways of working. A blunt instrument such as blanket taxes will not address climate change effectively.

“We have learnt this from the Climate Change Levy, which is nothing more than a tax that does not change behaviour. More taxes in the same format will simply hold back the UK economy – costing jobs and businesses – while other countries thrive. Businesses understand that economic growth and action to tackle climate concerns can go hand in hand. The government should use its Climate Change Bill to demonstrate that it will do the same.”

Association of Chartered Certified Accountants:

"The commitment to cut the UK's emissions by 60% by 2050 is ambitious. ACCA believes that green taxes need to be ring-fenced and actually go towards paying for initiatives to fight global warming. It would be more acceptable to taxpayers if their hard-earned money is used for specific environmental measures, not just for general revenue-raising."

Further Education Bill

Richard Lambert, director general, Confederation of British Industry:

"The government's commitment to put business needs at the heart of the further education sector is welcome. However more should be done to ensure the system is demand-led and that FE colleges work in partnership with employers. Also, the rules ring-fencing funding for colleges should be abolished to ensure that employers have access to the best courses, regardless of whether they are public or privately run."

Carol Undy, national chairman, Federation of Small Businesses:

“Many of our members report that school-leavers are not ready for work from day one. Education reform must focus not only on vocational skills but also on providing young people with communication skills and an appreciation for the need to be punctual and well-presented. This will help boost the productivity of UK small businesses.”

Nick Goulding, chief executive, Forum of Private Business:

"It is heartening that the government has taken notice of the skills gap, however more needs to be done to address the needs of smaller firms. Sector Skills Councils look great on paper but the reality is that they are not demand-led and simply design a system to accommodate the needs of larger companies."

David Frost, director general, British Chambers of Commerce:

“We welcome the announcement of a Further Education Bill to take forward the government's plans to make the FE sector more efficient and responsive to the needs of business and the economy. This will take forward government plans to give the Further Education sector an economic mission. However, we would like assurances that the government will continue to reform the funding of Further Education to make the system more demand-led, driving up standards in the sector and ensuring that employees get the best, most flexible training, which is best suited to their needs and those of business.”

Professional Contractors Group:

"The Queen's Speech fails to recognise the changing nature of work in Britain today and thereby jeopardises the economic stability the government seeks to maintain.

"The Professional Contractors Group (PCG), the cross-sector representative body for freelance contractors and consultants in the UK, has reacted with disappointment to the failure of the Queen's Speech to give any consideration to the nature of work in the UK."

Pensions Bill

Richard Lambert, director general, Confederation of British Industry:

"We welcome the broad thrust of the bill. An easy-to-understand state pension should be the bedrock for any sustainable long-term pensions settlement but the quid pro quo is that the entitlement age will have to rise. We support the government's agenda to extend working lives but, where necessary, it must help older workers brush up their employment skills."

Carol Undy, national chairman, Federation of Small Businesses:

“The Pensions Bill will need to be finely balanced. The government has to safeguard people’s futures but it must not put jobs at risk. Small firms will need longer to implement the proposed pensions changes and will need the proposals to be light on compliance requirements.”

Chris Kenny, director of life and pensions, Association of British Insurers:

“The Pensions Bill represents an important step on the long road to reforming Britain’s pensions system. We support the establishment of a Delivery Authority to oversee the introduction of Personal Accounts. Much more work is needed to get the fine detail right and, crucially, the government must ensure that the existing pensions market, which serves millions of customers well, is able to prosper.

“We also support moves to link the Basic State Pension with earnings, gradually increase the state retirement age and make the whole system fairer for women and carers. But if the government is to achieve the aim of getting more people saving more for their retirement, the Bill must contain firm measures to reduce means-testing in the pensions system.”

David Frost, director general, British Chambers of Commerce:

"We have serious concerns about the compulsory contribution of 3% that employers will have to make.

The BCC is requesting the following:

1. Additional tax incentives over and above the 1% currently on offer to enhance the attractiveness of PAS for employees.
2. A reduction in years 1, 2, 3, 4 & 5 of the employer’s National Insurance contributions equal to the employer contribution required in year one dropping by 20% a year to ease the employer cost burden over a 5/6 year introductory period.
3. A flat rate lump sum payment, to cover all costs associated with the implementation of the revised procedures.
4. The payment of all ongoing employer costs in administering the contribution deduction system. 5. The creation of a special training and education budget for business organisations to provide initial and ongoing employer support on the implementation and ongoing running of PAS during the years up to 2012, and the years after.
6. The government should allocate a budget to communicate the changes to the business community so that it is made clear that companies that have to pass on increased employment costs to their customers have done so due to the re-engineering of the state pension system.
7. The government should re-introduce tax credits on equity dividends for pension accounts and pension funds.
8. Special additional financial and administrative help for smaller employers, who will be hit disproportionately.
9. Consider an ongoing reduction in employer NI contributions to boost the attractiveness of the PAS system."

Eric Anstee, chief executive, Institute of Chartered Accountants in England & Wales:

"The Pensions Bill has the potential make a significant difference to the planning of retirement provision. As an issue, this not only needs political consensus but also the support of employers and employees in reaching a solution. Our own research shows that this can be achieved."

Association of Chartered Certified Accountants

"ACCA welcomes the fact that the government seems ready to act on long-term reform of the state pensions system following the Turner report and the subsequent Department of Work and Pensions (DWP) white paper.

"The Bill is likely to restore the link between the state pension and earnings, and to extend the state pension age to 68. It remains to be seen whether the Government will consider economic conditions adequate to justify the restructuring of the earnings link. ACCA points out, however, that the Turner Report and White paper proposals were presented as a package and should be delivered as such, and not as a 'pick 'n' mix'."

Tackling road congestion

Richard Lambert, director general, Confederation of British Industry:

"The government's commitment to tackle road congestion is very welcome and road pricing will potentially play a key in delivering this as part of a wider integrated transport strategy. Debate on the draft bill needs to deliver clarity on the timetable, scope and conditions under which any road pricing scheme would operate."

David Frost, director general, British Chambers of Commerce:

“We recognise that it is unrealistic to expect any new road pricing scheme to be revenue neutral but the Department of Transport must guarantee that money raised is spent on improving the road network and on improving public transport. We are heartened that schemes will be local in nature one than be a one size fits all model.”

Carol Undy, national chairman, Federation of Small Businesses:

“Our members have told us that they cannot change their journey patterns or times even if they wanted to. A tradesman cannot take his tools and equipment on the bus to get to a customer’s house. Therefore, pay-as-you-go proposals will be seen as another tax on small firms.

“This Bill will hold back economic growth amongst the 4.3 million small businesses unless intelligent, locally-based solutions are worked out to prevent only non-essential journeys.”

Nick Goulding, chief executive, Forum of Private Business:

“The publication of a draft Bill to tackle road congestion was a point of concern. The FPB has previously expressed its concern about road pricing as a solution to congestion and has argued that a broad approach must be taken, including greater emphasis on transport alternatives.

"Our members particularly worry about the effect such schemes have on their custom, with retailers in London reporting a marked decline in footfall since the congestion charge was introduced, we need to make sure alternatives to road use are in place. Above all, we want to avoid the government using remedies such as road pricing as another revenue raiser."

Exchange and Clearing Houses Bill

Eric Anstee, chief executive, Institute of Chartered Accountants in England & Wales:

"The Exchange and Clearing Houses Bill is also welcome as a means of safeguarding the UK's corporate governance regime as it impacts on the City of London."

Association of Chartered Certified Accountants:

"Protecting the UK's risk-based regulatory regime is essential to maintain London as the global centre of business. ACCA believes UK companies must not become subjected to US-style burdensome regulatory requirements, such as the Sarbanes-Oxley Act."

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