Northern Ireland

Increasing volume of legislation costs businesses £2bn

Nigel Smyth
Image caption Nigel Smyth of the CBI says businesses are having to deal with an increase in legislation

Businesses have lost out on more than £2bn in the last decade due to an increasing volume of legislation, according to business lobby group the CBI.

Nigel Smyth's comments come ahead of the Chancellor, George Osborne's first annual Budget statement on Wednesday.

Mr Smyth said additional support for growth and job creation was needed.

He also called for less red tape, particularly relating to employment.

Mr Smyth said that business organisations had been lobbying hard to encourage government to reduce barriers to high-growth companies in order to create employment.

"This includes doing something to relieve the regulatory burden," he said.

Look ahead to the likely content of the budget Dr Esmond Birnie, chief economist for PricewaterhouseCoopers NI, said any tax increases would have a serious effect on the local economy.

Business confidence

"February's unemployment is up 6.3% year-on-year," Dr Birnie said.

"That is the highest increase of all 12 UK regions, and we are forecasting that local economic growth will not exceed one per cent in 2011.

"It means that further tax increases could have a disproportionate impact on economic growth and business confidence."

It is thought that the 1p rise in fuel duty due on 1 April may be postponed because of the recent steep increase in oil prices.

Personal tax allowances are set to go up by £1,000 to £7,475 for 2011/12 which it is estimated should reduce the tax liability of 23 million taxpayers by an average of £200 a year.

The Chancellor has already promised to increase personal allowances to £10,000 by 2015.

Meanwhile speculation is continuing over whether an announcement will be made on the corporation tax rate in NI.

Some economists and Northern Ireland business people have argued strongly that a reduction from the current rate of 28% closer to the rate of 12.5% which exists in the Republic, would do much to encourage inward investment.