Business groups react to Queen's Speech

Business groups have given their reactions to the Queen's Speech, in which her Majesty set out the legislative agenda for the coalition Conservative/Liberal Democrat government.

Among the bills likely to interest businesses, the speech outlined measures to make airports more competitive, scrap identity cards, block the scheduled rise in employer National Insurance Contributions and ban the sale of below-cost-price alcohol.

In addition, a Financial Reform Bill seeks to shift the responsibility for macro regulation of the economy from the Financial Services Authority to the Bank of England, while a bill establishing an Office of Budget Responsibility would create an independent body with the responsibility to provide forecasts for economic growth and borrowing.

David Frost, director-general of the British Chambers of Commerce (BCC), said that the organisation welcomed the Government's programme to reduce the budget deficit, and that it had "broadly chosen to avoid placing additional regulatory burdens on wealth-creating businesses".

However, stating that "the age of the public sector has come to an end", Frost warned that the BCC would continue to judge the Government's performance based on "the delivery of a clear plan to deliver business growth".

Confederation of British Industry (CBI) deputy director-general John Cridland echoed these sentiments, adding that the coalition was "right to put deficit reduction and securing economic growth at the heart of its first Queen's Speech".

Airports

Commenting on the Airport Economic Regulation Bill - which seeks to stimulate growth at airports despite the decision not to build further runways in the South East - Cridland added: "Airports provide a gateway to foreign markets, and are therefore vital to [the] UK's prosperity. This bill opens a dialogue with the aviation industry and the wider business community about how airports can meet the needs of economy."

Cridland also welcomed moves to block a 1% increase in employers' National Insurance contributions scheduled for April 2011 - a divisive topic in the run up to the general election.

"Any increase in National Insurance is a tax on jobs and undermines retailers' ability to maintain and create employment," said director-general of the British Retail Consortium (BRC) Stephen Robertson.

"Raising National Insurance will hamper retailers' ability to maximise their contribution to the recovery."

ID fears

Retailers also expressed concern about proposed law changes on the sale of alcohol, and the scrapping of the ID card system.

Robertson described irresponsible drinking as "a complicated issue with deep-seated cultural causes". He added that charging shops more for late-night licenses meant that retailers and customers were effectively being "made to pay for the irresponsible behaviour caused by a small minority", while sending a message that "individuals need not take any personal responsibility for their actions".

And James Lowman, chief executive of the Association of Convenience Stores, aired retailers' concerns at the demise of the ID card scheme, arguing that it ended "the prospect of a definitive, universal proof-of-age card".

"As ministers move to end the ID culture, they must not forget the vacuum that this leaves and their obligation to support local shops in their important role on the front line of preventing underage drinking and smoking in communities," he added.

Meanwhile, research published today by the BRC suggests that a VAT rate rise from 17.5% to 20.0% - understood to be a possible measure for Chancellor George Osborne's emergency Budget of 22 June - would cost 163,000 jobs over a four-year period.

IMAGE: Arthur Edwards/PA Wire/Press Association Images

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