Birmingham Chamber of commerce warns on cost increases for business
Mar 30 2009 by John Cranage, Birmingham Post
Companies are facing cost increases in the next few days that will be “hard to bear”, business leaders in the West Midlands have warned.
The first week of April will see struggling organisations hit by a record 4.9 per cent in business rates on top of a further 2p a litre rise in fuel duty, Birmingham Chamber of Commerce and Industry says.
Estimates of the additional collective burden on UK businesses from the business rates rise alone is as much as £1 billion, and the fuel duty rise will be particularly tough for those in the transport and logistics business.
Bridget Blow, president of the Chamber, said: “Many companies will feel that the decision to allow the unprecedented high business rates to stand is unjustifiable in the current market, not least because the retail price index inflation figures from which it is derived actually fell to zero per cent in February.
“On top of that many retailers will be facing a quarterly lease or rent payment and will be filing their tax returns and payments.
“It really is a bleak outlook for many companies, and for some, this week could be the straw that breaks the camel’s back.
“We understand that public finances are in a poor state but the Government must avoid creating further excessive taxation demands on business in April’s Budget.
“Businesses in the West Midlands are the region’s key wealth generator. Increasing their tax burden will slow recovery as well as force many to reduce their investment, training and even staff, to make ends meet.
“We urge the Government not only to consider more fully what impact these kind of ‘taxations’ are having on business, but to implement an immediate moratorium on further red tape and regulation which will be costing the region’s firms in excess of £6 billion this year.”
The Chamber’s warning closely followed a report by the British Chambers of Commerce showing that new regulations have cost British businesses £76.81 billion since 1998.
More than £10 billion of that was incurred in the last year alone, according to the BCC’s 2009 Burdens Barometer compiled from Government figures.
Most onerous has been the Working Time Regulations 1999 which have so far cost companies £17.8 billion and which are draining a recurring £1.8 billion a year from their balance sheets. That was followed by higher vehicle excise duty which has cost £10.4 billion so far and which is now adding £1.8 billion a year to costs.
BCC director general David Frost said that with company cash flow being squeezed, “the Government needs to get serious about reducing the massive burden of regulation.
