Minister defends tax taper decision

11:38am Tuesday 23rd October 2007

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GOVERNMENT minister Lord Digby Jones has vowed to take the concerns of Bolton's business community directly to the Chancellor.

Lord Jones, the Minister of Trade and Industry, spoke to the region's businessmen and women at an event in Bolton last week about Alistair Darling's decision to scrap capital gains tax taper relief in favour of an 18 per cent flat tax rate.

He described the move as "revolutionary", but conceded that some businesses consider it to be a "terrible" decision.

The Chancellor of the Exchequer announced the plan in his Pre Budget Report, earlier this month.

Yesterday, Mr Darling met with leaders of the UK's biggest business organisations, who had warned that the tax change would hit small business and entrepreneurs, rather than the private equity firms it was designed to target.

But Lord Jones said: "This headline rate doesn't exist in any other developed economy in the world. Because of the way private equity firms were doing their investments, the system was wrong and unfair so it had to be changed.

"None of these big guys are going to leave Britain for eight per cent, so you keep the money makers in the country while ensuring that the public sees a fair system.

"However, I have learned that medium-sized businesses, in particular, think this is a terrible thing. I want to understand your questions and concerns and I promise I will relay what you have said to the Chancellor in private."

He was speaking at a Question Time style event, hosted by Chambers of Commerce North West and attended by around 200 local business bosses at the Reebok Stadium.

Lord Jones was among a panel made up of TV celebrity Janet Street-Porter, Adam Hosker, the Blackburn-based contestant from BBC1's The Apprentice, Paul Rowley, group managing director of Rowland Homes, and Steve Broomhead, chief executive of the North West Regional Development Agency.

The event was hosted by ITV Granada presenter Rob McLoughlin and gave audience members the opportunity to challenge the panel on national and regional issues that affect the way they run their firms.

Adam Hosker, sales director at Rossendale firm Dream IT Group, said: "The town has quite a forward thinking set of business minds and being close to Manchester, I think the competition drives the local economy."

And Angie Robinson, chief executive of Greater Manchester Chamber of Commerce, said that she believed Bolton could benefit if companies decided to follow in the footsteps of BMW Williams.

The company recently announced that it was to move its headquarters from Manchester City Centre to Bolton to avoid possible congestion charging.

She said: "Bolton and its economy are thriving.

"It has a hugely ambitious local authority and a lot of people who both work and live in the town, giving it a sense of civic belonging and stakeholding."