Industry gave a cautious welcome to the announcement by chancellor Gordon Brown on Tuesday – in his first pre-Budget statement – of his intention to abolish advance corporation tax.
However, a spokesman for the Engineering Employers Federation said it needed to see the plans in more detail.
The intention to move to quarterly payments of corporation tax could have an adverse effect on some companies’ cashflow, said a spokesman at oil giant BP.
Brown said a system of quarterly corporation tax payments for large firms will be phased in over four years from 1999, and the main rate of corporation tax will fall by 1% to 30%.
Declaring ‘we are all long-termists’ now, Brown promised measures in next spring’s Budget to reform capital gains tax to encourage long-term investment.
A Competition Bill to make sure small businesses are not held back by cartels and monopolies will be introduced.
Brown planned to legislate for a Code for Fiscal Stability to ensure that fiscal policy is in line with the aim of promoting long-term economic stability.
The Government will this week publish a paper on the labour market and is looking for industry feedback, Brown said. Another paper on fiscal policy will be published in December.
While calling for shop floor moderation on pay, he said there had to be moderation in the boardroom too.