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Business - Djanogly Warns : Budget will not stop Local Businesses Drowning in Red Tape


18th April 2002

Jonathan Djanogly has warned that businesses in his constituency are in danger of being strangled by an ever-growing burden of red tape and bureaucracy and that the budget will do little to help.

Jonathan Djanogly, Member of Parliament for the Huntingdon Constituency, has warned that businesses in his constituency are in danger of being strangled by an ever-growing burden of red tape and bureaucracy and that the budget will do little to help.

Mr Djanogly's warning follows a survey he recently conducted amongst a cross-section of his local business community. The pre-budget survey asked a number of questions relating to steps the Chancellor could and should announce in this year's budget. It also sought to establish the feeling of local business as to what the next twelve months may hold.

The results make interesting, if depressing, reading. They may not be scientific, but they do send some very clear and interesting messages. Local business could be greatly helped by a sensible business-friendly budget. In particular, they are looking for a cut in Petrol Tax, Corporation Tax and Capital Gains Tax. IR35 and the Climate Change Levy are also cleary areas where local businesses are looking for action.

"The most striking single thing to emerge from the replies I received was the huge amount of time many respondents are having to spend filling in forms and dealing with red tape," commented Mr Djanogly. "The Government came to power promising to cut bureaucracy, but this survey shows that many businesses are in danger of drowning in a sea of paperwork.

Of the many issues reflected in the survey, the Chancellor addressed two of them in his budget: Businesses will be pleased that the VAT system is to be reformed, although we will have to see how the plans work in practice.

The cut in small companies Corporation Tax from 20% to 19% will also be welcome. However, Mr Brown's changes to National Insurance Contributions for employers amount to a 3% rise in Corporation Tax. We need to keep in mind that manufacturing has now been in recession for some time - low or nil profits of many struggling companies will mean that Corporation Tax will be less relevant to them than the hike in NIC, which they will have to pay whatever their financial salary.

It is time the Chancellor stopped paying lip service to the needs of local business and started cutting the burdens that stifle enterprise. Mr Brown had his chance to do that yesterday and he failed," said Mr Djanogly."



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