Keeping our capital working for the UK

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Business Budget response (22 June 2010)

Commenting on the Chancellor’s Budget, Chief Executive of business group London First, Jo Valentine, said:

“We have pressed the Government to protect capital spending on infrastructure, and to prioritise spending which has the highest economic impact. The Chancellor has committed to both, although sticking to the previous Government’s capital spending plans still means significant cuts.
“Nevertheless, spending targets are tough – there’s every incentive for the whole of the public sector to look for efficiencies and for programmes which may have seemed attractive when times were good, but offer insufficient value now, in order to protect spending which has strong economic impact. There ought to be an increased role for the private sector in helping Government to deliver these savings and it’s all eyes on the Autumn spending review.”

“The Chancellor’s balance of roughly 4:1 between spending cuts and tax rises seems about right to us. He has seized upon VAT as the least worse tax rise and, reluctantly, many business leaders would agree with him. It is broad-based, so raises the maximum amount for the Taxman with the least impact on competitiveness. Retailers will welcome the notice period, so re-pricing can be done as efficiently as possible. A clear direction of travel on corporation tax is welcome but we would have liked to see a commitment to reduce the 50% higher rate of income tax, if only as an aspiration at this point.”

“The levy on banks is a worry. London’s agglomeration of international financial and professional services companies brings huge benefits in employment, investment and tax revenue. If the levy on bank assets provides another reason for these companies to reconsider their presence in London, it could be a very expensive mistake. How other G20 countries deal with the same issue remains crucial to this being effective.”

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Notes to Editors

London First is a business membership organisation with a mission to make London the best city in the world in which to do business. London First undertakes this by mobilising the experience, expertise and enthusiasm of the private sector to develop practical solutions to the challenges facing London. London First also seeks to persuade central and London government to make the investments that London needs in its infrastructure.

London First delivers its activities with the support of the capital’s major businesses in key sectors such as finance, professional services, property, ICT, creative industries, hospitality and retail. Membership also includes further education colleges and all of London’s universities. London First members represent over a quarter of London’s GDP.

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