THE HEAD of the Confederation of British Industry (CBI) has warned George Osborne against another raid on pensions, saying such a move would be “damaging to business”.
The chancellor is understood to be considering including a cut in tax relief in the Autumn Statement on 5 December. But speaking to City A.M. ahead of the business organisation’s annual conference, director general John Cridland said the chancellor should not be tempted to reduce the incentive for higher rate taxpayers.
“Personal tax affects businesses’ ability to deliver growth,” he said. “The 50p personal tax rate was damaging to British industry because it was putting off the world’s best talent wanting to base themselves in London. I am pretty clear that a hit on pensions tax relief for higher earners would be seriously damaging.”
Cridland also said the government is “weak” at implementing policies that could boost the economic recovery. Despite this he backed David Cameron’s demand for a real-terms freeze in the EU budget and said he was not overly concerned by job losses in the City, providing London can still maintain its status as the world’s main financial hub.
However he warned that it was “inevitable” that Britain would find itself side-lined in a European Union where key decisions are being taken by the 17 Eurozone countries.
“We’ve got to fight, and fight hard, for the single market of the 27,” the CBI boss said.