How Labour betrayed us, by CBI boss

TONY BLAIR faced a scathing attack on Tuesday night when a leading CBI figure accused Labour of betraying Britain's business community. With the Prime Minister sitting alongside him at a dinner, Sir Iain Vallance warned against the 'incipient arrogance' that can come with a second term in power. He accused ministers of 'dipping' their hands into the 'business till' and he condemned the National Insurance increases in last month's Budget as a 'tax on job creation'.

Sir Iain, outgoing president of the Confederation of British Industry, also claimed that Labour had loaded £70bn of extra costs on business since being elected five years ago. The Prime Minister replied sharply that he had been elected to 'fix the public services' and that's what he would do.

The clash marks a further low in Labour's relations with Britain's business community. Blair will have been particularly irritated at being lectured by Vallance, who was ousted as BT's chairman last year after a series of strategic decisions that plunged the company into massive debt.

However, in his speech at the CBI's annual dinner Vallance said of the NI rises: 'Despite the undoubted worthiness of the goal of a reformed health service, the episode has left something of a sour taste in the mouth of the business community.' It was not only 'an implicit tax on job creation', he said, but also the latest in a string of tax changes and regulations that had added a total of £70bn to business costs since 1997.

He added: 'You cannot keep on indefinitely dipping your hand into the business till without squandering the UK's advantage as a country in which to do business - without cutting open the goose that lays the golden eggs.' Also, he said: 'It is quite inconsistent to claim to promote an enterprise society on the one hand and to trammel it with regulations on the other.'

Blair, clearly stung by the onslaught, vigorously defended Labour's record. He said: 'Nobody likes paying taxes. Even after the Budget we remain a relatively low-taxed economy and one of the best countries in the world to do business. But I was elected to fix our public services, schools and hospitals first, and that is what I intend to do.'

Ominously for the Government, Vallance's successor as CBI President, Sir John Egan, has already signalled his lack of enthusiasm for joining the euro which is fast becoming one of Blair's flagship policies. Egan said earlier this week that business had swung from being broadly pro-euro to broadly neutral. 'Strong arguments in favour of joining have yet to be made and my suspicion is that there aren't any,' he said.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in