Portillo and Hague attack IR35 and red tape as anti-enterprise
The two leading figures in the Conservative party sent a broad-side to the Government this week about the damage they are doing to the enterprise economy.
Conservative Leader, William Hague, and Shadow Chancellor, Michael Portillo, used public platforms within 24 hours of each other to warn the Government that the red tape and stealth taxes will cripple small entrepreneurial businesses.
Shadow Chancellor, Michael Portillo, continued the campaign started by his predecessor, Francis Maude, against the injustice of IR35. In an article in the Daily Telegraph, Portillo warned Chancellor Gordon Brown that the Government's heavy-handed approach to business will lead to job losses in the traditional industries and stifle enterprise and growth in the new high-tech sectors. He also pointed out a reality that the Government has to date scoffed at - that people now have the flexibility to move abroad to more favourable climates.
Portillo said: 'Mr Brown is damaging Britain's competitiveness. E-commerce makes it possible for people to do business without regard to geography, frontiers and time zones. New technologies are making a reality of the perfect market, 200 years after Adam Smith first described it.
'That makes it more important than ever that national policies should make Britain an attractive place to do business.
'The Government has harmed the new economy. A tax called IR35 is targeted at IT specialists. These people can get work anywhere in the world, and we are driving them away.'
Speaking at a business leaders dinner in London, Conservative leader, William Hague, promised that the Conservatives would lead Britain's enterprise revolution.
In the week that Rover was salvaged at the 11th hour and Ford's Dagenham plant announced huge job losses, Hague slammed the Government for betraying the traditional manufacturing industries and also promised a better future for enterprise.
He said: 'It is Labour policies that are choking British business and destroying our manufacturing base. It is this Labour Government that according to the British Chambers of Commerce has introduced £10 billion of new red tape and regulation on business, turning them into benefit offices for the state and blunting their ability to compete. It is this Labour Government that has imposed £5 billion of taxes a year on businesses.
'No wonder Lord Haskins, Labour's hand-picked business guru, says 'entrepreneurs are being distracted from running and growing their businesses by the cumulative burden of taxation and regulation'.
'Our ambition is not just to stem the tide of regulation and red tape, but to be the first Government that reverses it. We will force Whitehall departments to cost the burden of their red tape on business and then cut them year on year. We will put sunset clauses on regulations so that Ministers have to constantly assess their impact on businesses. We will look to exempt small businesses from whole classes of regulation.
'We are under no illusions of the huge effort required to reverse the tide. But unless we achieve actual reductions in the regulatory burden on British business, they will be unable to compete on equal terms with their American and Far Eastern rivals.'
One political commentator said: 'It is significant that as we've entered the count-down year for a General Election, the two Conservative heavy-weights have flagged up the Government's stealth taxes and the enterprise economy as key issues.
'Usually General Elections are fought on the traditional issues of health, education and personal finances. In the unofficial forthcoming 'election months' it would seem that the Conservatives are going to use the stealth taxes, including IR35, introduced by this Government as a campaigning issue. The Government is in a vulnerable position as the predicted damage that these measures will inflict on the enterprise economy become a reality and it seems likely that prospective Labour candidates will find themselves trying to justify this measure on the doorsteps of many houses around the country as the Election campaigning gears up.'