Labour did so much to woo business but the recent proposed changes to Capital Gains Tax have united business organisations in opposition. George Osborne met leading members of a campaign to see the CGT reforms reversed and has just said that "there is a good chance that Alistair Darling will be forced to climb down over his plans to remove taper relief on CGT, which impose an 80% tax rise on long-term investors."
The Shadow Chancellor was speaking as he published interim results from an independent commission on enterprise commissioned by the Conservative Party. The European School of Management report uncovered the following worrying trends:
- "The proportion of businesses that achieved an annual turnover above £1 million five years after their creation has nearly halved from 29% in 1998 to 16% in 2006.
- According to an Entrepreneurs Organisation (EO) survey, if taper relief is scrapped then 33.3% of respondents would emigrate now and 33% would consider it seriously in the future.
- The proportion of UK companies that have turnover above £7m, five years after creation is less than half the EU average."
Mr Osborne’s campaign against CGT coincides with a ComRes survey that shows he is winning the confidence of business leaders. ComRes interviewed 255 "London business leaders" and found that 49% were fairly or very confident in George Osborne. Only 15% said the same of Alistair Darling and only 30% said the same of Gordon Brown. Click on the image on the right to see the extent of business leaders’ lack of confidence in the Chancellor’s ability to understand business and to support enterprise.