BUSINESS LEADERS have clashed with British chancellor Alistair Darling and business secretary, Lord Peter Mandelson in a row about a plan to raise £12 billion next year in higher national insurance charges.
In a letter to the Daily Telegraph20 businessmen, including Irishman, Aidan Heavey of Tullow Oil, yesterday criticised Mr Darling's decision, announced in late 2008, to increase national insurance rates by one percentage point for both employees and employers from April 2011.
Earlier this week, the Conservative Party said, if elected, it would halve the planned insurance rise – which will cost the Treasury £6.5 billion of revenue which has already been budgeted into official spending plans.
“My guess is that these senior businessmen did not get where they are today by accepting such flimsy advice. My advice to these businessmen today is to go and have a long look, because there are serious questions to ask,” said Mr Darling.
Lord Mandelson, who launched a Labour investigation of the Conservative tax and spending plans said: “Of course there are some in business who are going to support what appears to be a pain-free tax cut. I mean, who wouldn’t? But the point is, this is not pain-free and Mr Cameron and Mr Osborne are peddling a deception,” he said, adding that it is clear that the Conservatives will increase VAT rates if elected, as they did in 1979 and 1992.
The best-known figure who signed the letter, executive chairman of Marks and Spencer, Sir Stuart Rose had just a month ago urged the Government to cut the deficit more quickly than it plans to, said Lord Mandelson.
Mr Rose then had said that “if we don’t take the medicine now, the medicine will be more painful for us to take later”, Lord Mandelson told a press conference: “Now he is being offered medicine postponed in a quack remedy by a quack shadow chancellor”.
The decision of the business figures to declare their opposition to Labour’s plans – on the grounds that it would cost jobs – has been seized upon by the Conservative Party leader, David Cameron.
Head of the retail chain, Next, Simon Wolfson, who is a longstanding Conservative supporter, responded to the Labour criticisms: “Of course we have not been deceived.
“The principle is a very simple one. It is a question of, do we pay for government profligacy through increased taxes or do we urge them to save money in a way that businesses have?”
Meanwhile, Mr Ian Cheshire, the chief executive of Kingfisher, which owns B&Q, among other companies, was equally irritated. He said: “It’s a little patronising to suggest that we’ve been deceived.”
