Darling on the back foot

David Cameron and Alistair Darling locked horns at the CBI conference in London on Tuesday – and not surprisingly, the Chancellor's controversial tax plans proved to be the main battleground.

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Last Updated: 31 Aug 2010

Cameron clearly smelled blood, following the business community’s angry response to Darling’s capital gains tax hike, and the CBI gathering seemed to be the perfect opportunity for him to go in for the kill (although since he seemed to spend much of last year distancing himself from business in his desire to woo Middle England, some of those present may have been sensing a touch of opportunism).

'How does it help to put burdens on our wealth-creators while France, Germany, Australia and Spain are all busy liberalising, cutting tax and cutting regulation?' he demanded on Tuesday, calling on Darling to back-track. 'The best thing he could do is stand up, admit he's made a mistake and abandon his ill-conceived plans'. Given the audience, he was probably preaching to the converted.

But he wasn’t just complaining about CGT. The Tory leader thinks his right honourable friends on the other side of the chamber have increased the tax and regulatory burden to unmanageable levels. ‘Business faces huge pressures today, and government's role should be to make it easier, not harder, to do business,’ he said.

Labour is the real problem, apparently. ‘Government has got too big and too bossy and a big change is required.’ he proclaimed, arguing that government departments were wasting millions of pounds every year. ‘Big centralized bureaucracies are incompetent and can't be trusted. We will be a Government for the post-bureaucratic age,’ he concluded (whatever that means).

Not surprisingly, Darling had a slightly different take on the whole thing, pointing to the 10-year growth in the UK economy and arguing that our barriers to entrepreneurship were the lowest in the EU. He also provided a robust defence of the CGT hike. The controversy was ‘inevitable’, he admitted, ‘but many have long called for a simplified tax system and complained about the complexity of the tax system’ (that’s the tax system built by his boss and predecessor that we’re talking about here, of course).

Still, there was a ray of hope for business owners. Darling hinted that he could be prevailed upon to modify his plans before they pass into law. ‘We are working with the CBI and other business organisations to listen to what you have to say,’ he said, promising to reveal his final proposals in three weeks.

But either way, the Tories clearly think they’ve stolen a march here – expect business tax simplification to stay at the top of the political agenda for a while yet...

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