CBI call to protect heavy industry from soaring costs

HEAVY industry sectors such as steel manufacturing should be protected against rising energy costs if UK jobs are to be saved, according to leading business lobby group the CBI.

In an assessment of the Government’s performance in its first year, CBI director-general John Cridland said some areas, including the steel sector, aluminium and chemicals, are so vulnerable they need help.

“In the current policy mix we’re saying to manufacturers: ‘Please fill the gap left by the retreating state, but we’ll also significantly increase your energy costs’. It doesn’t work,” said Mr Cridland.

He said the most vulnerable area is heavy industry.

“I want this manufacturing done in the UK.

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“We can only manufacture if electricity is at a competitive price,” he said.

“There are particular sectors where targeted help will stop us losing jobs and exports that should be based in the UK,” he added.

On the thorny subject of business taxes, the CBI said the coalition Government has overseen a positive start to tax reform that has put in place many of the CBI’s proposals for a more competitive business tax environ- ment.

The CBI praised the Government’s Plan for Growth initiative, which broadened its corporation tax commitment to the whole tax system, pledging to make it the most competitive in the G20.

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But the lobby group said the 50p income tax band is a critical blocker to attracting and retaining top talent, which deters high value investment in the UK.

The CBI is calling on the Government to remove the 50p income tax rate as soon as the public finances allow and within the lifetime of this Parliament.

On the issue of reforming the banking system, the CBI said the Government has made good progress, but has sometimes acted in isolation or front-run international agreements. Despite this it said that the banking sector is in better shape now because of a number of important steps that the Government and UK regulators have taken.

It said that priorities for the next 12 months include scrutinising the Banking Commission proposals and only implementing them where they are in line with international reforms.

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The CBI is also calling for the Government to ensure that European Union capital reforms (Basel III) do not choke off lending to businesses, particularly for export finance and small to medium-sized businesses.

It concluded that the Government should reject proposals for any further UK or EU financial services taxation, which it said would add to political uncertainty and damage the country’s standing as a global financial cen- tre.

Politics & Economy: Page 4

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