News Article - 20 March 2007
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The Confederation of British Industry (CBI) has welcomed proposals by the Conservative Party to slash corporation tax by three per cent.

However, the removal of several tax reliefs would not make noticeable changes to the tax burden, the organisation's director-general has said.

According to CBI chief Richard Lambert, cutting the headline rate could help combat the erosion of the UK's competitiveness as an investor centre as the country needs to lighten the load on businesses.

"Equally, there are dangers that the removal of these tax reliefs will have potentially wider consequences, particularly on business investment in manufacturing and by introducing volatility into the taxation of capital gains.

"These aspects will need to be examined and measures taken to mitigate them," he said.

However, he said that the party's proposals showed positive signs and called for a signal from the chancellor that he is aware of the concerns of UK businesses and is preparing to act.

Companies in the UK require a significant reduction in tax to allow the country to compete around the world and help develop its prosperity, he added.

Earlier this week, the Tories called for a reduction from 30p to 27p to help businesses which were struggling with the "double burden" of high rates and complex tax regulations.

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