Small firms believe the government's enterprise strategy is "shot to pieces", John Cridland, deputy director-general of the CBI, says.
Small firms believe the government's enterprise strategy is "shot to pieces", John Cridland, deputy director-general of the CBI, says.
The business body surveyed 500 members on changes to capital gains tax proposed in the Pre-Budget Report.
The business body surveyed 500 members on changes to capital gains tax proposed in the Pre-Budget Report.
These included the replacement of CGT taper relief with a flat 18% rate.
These included the replacement of CGT taper relief with a flat 18% rate.
But 63% of firms surveyed said they did not believe red tape would be cut and about 40% said they had altered business investment plans as a result.
But 63% of firms surveyed said they did not believe red tape would be cut and about 40% said they had altered business investment plans as a result.
Chancellor Alistair Darling says the changes are designed to simplify the tax regime.
Chancellor Alistair Darling says the changes are designed to simplify the tax regime.
But industry groups have warned the changes will hit small businesses and entrepreneurs.
But industry groups have warned the changes will hit small businesses and entrepreneurs.
'Start again'
'Start again'
"I'm afraid that as of today small businesses believe the government's enterprise strategy is shot to pieces," said Mr Cridland.
"I'm afraid that as of today small businesses believe the government's enterprise strategy is shot to pieces," said Mr Cridland.
"The government is going to have to start again and it has a lot to do to convince the small business community that it understands their contribution to the seedbed of the economy - that this is where jobs and growth come from."
"The government is going to have to start again and it has a lot to do to convince the small business community that it understands their contribution to the seedbed of the economy - that this is where jobs and growth come from."
I can't remember an issue on which there is such a strength of view in the small business community John Cridland
I can't remember an issue on which there is such a strength of view in the small business community John Cridland
In a speech, the Conservative leader David Cameron is expected to label the government's handling of the issue as "incompetent" and fight the proposed reforms "every step of the way".
In a speech, the Conservative leader David Cameron is expected to label the government's handling of the issue as "incompetent" and fight the proposed reforms "every step of the way".
The survey of 500 small and medium-sized businesses (SMEs) also confirms anecdotal evidence of the impact of the credit crunch on the wider economy.
The survey of 500 small and medium-sized businesses (SMEs) also confirms anecdotal evidence of the impact of the credit crunch on the wider economy.
A total of 35% of them said they were experiencing or expected to experience some deterioration in the availability of capital over the next 12 months.
A total of 35% of them said they were experiencing or expected to experience some deterioration in the availability of capital over the next 12 months.
And 12% said it had already started to happen.
And 12% said it had already started to happen.
Mr Cridland said: "They are finding that when they want money the conditions are more stringent.
Mr Cridland said: "They are finding that when they want money the conditions are more stringent.
"They are finding the cost is higher, although the increase is modest. And therefore they are having to think much more carefully about their new investment plans."
"They are finding the cost is higher, although the increase is modest. And therefore they are having to think much more carefully about their new investment plans."
Overall the survey found that the impact of the credit crunch on economic activity still looks limited.
Overall the survey found that the impact of the credit crunch on economic activity still looks limited.
'Out of the blue'
'Out of the blue'
Of more concern to bosses are the proposed changes to capital gains tax. The controversial proposals mean that the owners of some small businesses are likely to pay considerably more tax when they decide to sell up.
Of more concern to bosses are the proposed changes to capital gains tax. The controversial proposals mean that the owners of some small businesses are likely to pay considerably more tax when they decide to sell up.
Mr Cridland said: "I can't remember an issue on which there is such a strength of view in the small business community."
Mr Cridland said: "I can't remember an issue on which there is such a strength of view in the small business community."
The changes are due to take effect at the start of the new tax year.
The changes are due to take effect at the start of the new tax year.
John Whiting, of accountants PriceWaterhouseCoopers, said business owners were assessing the impact of the proposed changes and many were considering whether they should try to sell by 5 April.
John Whiting, of accountants PriceWaterhouseCoopers, said business owners were assessing the impact of the proposed changes and many were considering whether they should try to sell by 5 April.
Mr Whiting added: "The changes came out of the blue, without any consultation, which was very disappointing."
Mr Whiting added: "The changes came out of the blue, without any consultation, which was very disappointing."
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