Brown hammers business leaders as Government forced into concessions

The PM insists bosses have got it wrong over NI, as the 'wash-up' horse-trading begins in earnest...

Last Updated: 31 Aug 2010

Gordon Brown launched the first full day of his Election campaign by attacking some of Britain’s top bosses this morning: the corporate big-wigs who have publicly supported the Tory plan to reverse the proposed NI hike ‘have been deceived’, the Prime Minister insisted this morning on GMTV. It’s not a new line - Lord Mandelson said the same thing last week - but it doesn’t sound any less patronising second time around. Predictably, the Tories promptly accused him of ‘declaring war on British business’. And while that may be a bit overblown (verging on the bombastic), it’s fair to say that this isn’t the best way for Labour to make friends and influence people in the business world…

The PM told GMTV this morning that reversing the hike, as the Tories propose, would put the UK’s economic recovery at risk. ‘The Conservative’s policy would take £6 billion out of the economy. That is a huge sum of money,’ he insisted, going on to argue that higher NICs meant more teachers, more doctors and free candy floss for every man, woman and child in the UK.

The latest figures do emphasise how delicate the situation is. Today’s Markit/ CIPS service sector data show that growth slowed in March after February’s three-year high, but suggest an upturn in the manufacturing sector. Meanwhile the British Chambers of Commerce said that its latest research suggests the UK economy continued to grow in the first quarter of 2010 – but not by much. So things remain very much on a knife-edge.

However, the Government finds itself at odds with some of Britain’s leading businesspeople about the solution. It claims that raising NI will provide vital revenue; but last week’s letter to the Telegraph argued that this ‘tax on jobs’ would only harm the recovery by stifling employment growth. 23 leading figures from UK plc lent their support to the original appeal – and reports suggest that Ocado boss Tim Steiner, Asos chief Nick Robertson, and Yell chairman Bob Wigley have signed up to the cause since. Tesco has apparently declined to do so – but boss Sir Terry Leahy did say recently that we’d be better equipped for recovery ‘if businesses of all sizes are not burdened with more tax and regulation’. Like higher NI, for example.

Today’s comments rather suggest that Labour’s decided it doesn’t need business support, which is a shame. But at least the wash-up period prior to the dissolution of Parliament is giving the opposition parties a chance to scupper some of the Government’s more controversial recent moves. Yesterday it was forced to drop plans for a super-tax on cider, along with those for a new phone tax to fund superfast broadband, following Tory and Lib Dem pressure – the former claimed this as a victory for ‘business and consumers’. Nothing to do with marginal seats in the West Country, of course…

In today's bulletin:

Brown hammers business leaders as Government forced into concessions
Daimler thinks small with big Renault/ Nissan tie-up
Bye-bye Bebo? AOL gives up on $850m mistake
Editor's blog: Unilever boss says leaders must take the long view
Will our mobile phone networks run out of airwaves?

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