Wednesday, 16 January 2008

CGT dithering

If you don't know my views on the new proposed CGT regime then you clearly haven't been paying attention. I exploded last Oct when Darling first announced the increase from 10% to 18% in CGT on business assets. See post here. As I'd played a part in getting it to 10% in the first place, by lobbying first Kenneth Clarke and then Gordon Brown back in 1996/1997, I felt particularly aggrieved. This was the one really good demonstration that Labour had repented its old ways and would now be more 'business friendly'.

I've just been listing to Richard Lambert - Director General of the CBI - on BBC Radio 4's Today programme. He was angry! And he said that, in the whole history of the CBI, nobody could recall CBI members enmasse being so angry either. Darling had promised to review his ill-thought out 'back-of-a-fag-packet' proposals before Christmas. Then it was delayed to the New Year. But with an April tax watershed looming, nobody really knows what CGT regime will be in place in the next tax year. If you own a business, shares or options in a private business or even AIM shares, this really matters to you. You can read the CBI's proposals on CGT, as sent to Darling, here. I would broadly support these.

There is nothing that industry hates more than uncertainty. Darling has produced it in spades by his dithering. Lambert said that CBI members regarded Labours CGT proposals as a touchstone. Lambert believes that business support for Labour depends more on what happens to CGT in the weeks to come than almost any other issue.

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