Friday, November 11, 2011

Not much to add.
British business urges the Chancellor to invest in infrastructure, cut taxes and simplify regulations
Encouraging business and investment

SIR – In the run-up to the Chancellor’s autumn statement we are writing to express our concern about the impact of continuing global uncertainty on the British economy, shown by recent growth figures.
We do not believe there are any simple solutions to stimulating growth, but this letter sets out a few changes of emphasis which we believe would have a disproportionately positive impact.
We should begin by stating our general support for steps to reduce the British deficit. The economic strategy that the Government announced last year, which has deficit reduction as a central objective, is a necessary prerequisite for long-term economic stability and growth.
Our three recommendations are: a commitment now to increasing investment in infrastructure before the end of the Parliament; an adjustment to personal taxes to increase demand and encourage wealth creators; and standing firm on simplifying regulatory processes and resisting burdensome additional regulation from Brussels.
Turning to these in order: the current turmoil in southern Europe will have implications for several years. In these circumstances Britain needs to shore up its economy by re-invigorating its investment in economically productive infrastructure. The announcement of a long-term, planned, acceleration of investment will provide an immediate and important confidence boost together with a sustainable increase in economic activity and jobs in the medium term.
Britain’s infrastructure needs are substantial; Infrastructure UK estimates we need to invest some £200 billion, from both public and private sectors, over the next five years in vital networks.
The Comprehensive Spending Review set out the Government’s commitment to a series of crucial infrastructure projects, including Crossrail and the Tube upgrades, yet public net investment is nonetheless set to fall by around 15 per cent a year (a cut of nearly 50 per cent by 2014/15, according to the Institute of Fiscal Studies).
We urge the Government to restore investment to pre-recession levels by the end of this Parliament. The strategic framework set out by Infrastructure UK, informed by the new local economic partnerships’ views on local, economically productive projects, provides a sound basis for prioritisation.
Given the state of public finances, an increase in public investment should seek to maximise leverage of private sector balance sheets. Projects with income associated, such as tolled roads and bridges should be particularly encouraged and we would welcome the Treasury developing new public-private finance models to replace and improve on the PFI. As part of this work, we would encourage the Government to consider stimulating projects which are at the margin of commercial returns by accepting a greater risk where the project is in the public interest.
Secondly, we would encourage an acceleration of the Government’s commitments on two areas of tax policy: increasing the personal allowance and restoring 40 per cent as the top rate of income tax.
Raising the personal allowance will boost the disposable income of those households who spend a high proportion of their discretionary income and thus boost aggregate demand.
The Treasury has estimated the cost of raising the personal allowance by £630 to £8,105 in April 2012 to be £1 billion. We would like to see an increase of at least a further £1,000 in April 2012.
An early removal of the temporary 50 per cent tax rate would attract wealth generators to the United Kingdom and support the entrepreneurs we need to help us grow the economy and provide jobs. We await the conclusions of the HMRC evaluation of the sums raised by the 50 per cent rate; however, we are confident that the cost to the Treasury, if any, in the short term will not be material and that the advantages over the life of this Parliament in terms of generally increased economic activity will more than outweigh any direct costs.
These changes to tax policy are equitable and would boost demand and confidence at a modest short-term cost to the Exchequer.
Finally, turning to regulation, we welcome the overall thrust of government policy and appreciate that simplification is easier said than done.
We would, in particular, urge the Chancellor to continue with the Government’s “one-in, one-out” approach to regulation; to ensure that European employment directives are implemented so as to preserve the maximum flexibility for employers; and to implement the National Planning Policy Framework and the wider Plan for Growth.
Taken together, we believe these immediate actions would boost confidence, stimulate demand and set the United Kingdom on the right course to grow in the longer term.

Baroness Valentine
Chief Executive Officer, London First
Anton Valk
Chief Executive Officer, Abellio
Roger Madelin
Joint Chief Executive, Argent Group
David Tonkin
Regional Managing Director, UK Atkins
Alan Pepper
Chief Executive, Avanta
Sir Nigel Rudd
Chairman, BAA Airports
Tony Pidgley
Chairman, Berkeley Group
Harold Paisner
Senior Partner, Berwin Leighton Paisner
Bob Rothenberg
Senior Partner, Blick Rothenberg
Chris Grigg
Chief Executive, British Land
Hugh Seaborn
Chief Executive, Cadogan Estates
John Burns
Chief Executive, Derwent London
Michael Marx
Chief Executive, Development Securities
Anthony Arter
London Senior Partner, Eversheds
Beverley Aspinall
Managing Director, Fortnum & Mason
George Kessler
Group Deputy Chairman, Kesslers International
Francis Salway
Chief Executive, Land Securities
Dan Labbad
Chief Executive Officer for Europe, Middle East and Africa, Lend Lease Development
Robert Elliott
Senior Partner, Linklaters
Sir David Rowlands
Chairman, London Gatwick Airport
Patrick Seely
Managing Director, Mooreland Partners
Simon Johnston
Senior Partner, Nabarro
Annette King
Chief Executive Officer, OgilvyOne UK
Ian Powell
Chairman and Senior Partner, PricewaterhouseCoopers
Harvey McGrath
Chairman, Prudential
Adrian Wyatt
Chief Executive Officer, Quintain Estates and Development
Jasminder Singh
Chairman & CEO, Radisson Edwardian Hotels
Andy Raynor
Chief Executive, RSM Tenon
Ian McAlpine
Senior Partner, Sir Robert McAlpine
Mike Putnam
President & CEO, Skanska
Gareth Pearce
Chairman, Smith & Williamson
John Treharne
Chief Executive Officer, The Gym Group
Mike Nichols
Chairman and Chief Executive, The Nichols Group
Vincent Clancy
Chief Executive Officer, Turner & Townsend
Professor Malcolm Grant
President and Provost, UCL
Basil Scarsella
Chief Executive Officer, UK Power Networks
David Joyce
Chief Operating Officer, Vinci
Steve Purdham
Chief Executive Officer, We7

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