One in three firms 'move jobs abroad'

TONY BLAIR was accused on Sunday of dragging Britain backwards as a place to do business. The Confederation of British Industry launched a blistering attack on the Government's record since 1997.

One in three firms has already moved parts of its business abroad because of extra tax and red tape and 'dissatisfaction' with schools, hospitals and transport, CBI research suggests.

The Prime Minister will today be forced to face down the charges when he addresses the CBI annual conference.

The confederation warned that if the Government wanted to win the business vote at the next General Election, its attitudes would have to change.

It claims that almost six in ten firms are likely to expand their operations outside the UK in the next two years. More than two in five face severe pressure to relocate part of their business abroad on top of the third who have already done so.

Manufacturing production, call centres, research and development, computer support and accounts are just some of the work moved abroad.

An increasing number of business leaders are looking overseas to cut costs but also because of a lack of skilled workers in the UK.

Seven in ten of 250 captains of industry surveyed said that Britain was now a worse place to invest than five years ago. Six in ten believed it would get worse still.

Two thirds of bosses, including chairmen, chief executives and top directors, believed the Government was placing a low priority on creating a good environment in which to do business. Three quarters believed Blair's Government was less business-friendly than five years ago.

CBI director-general Digby Jones said: 'When top company decision makers start giving the kind of signals contained in our survey, the Government must sit up, listen and take action.'

One comment from an executive to a researcher was: 'The Government recognises that wealth is created by business. It knows that but it screws up with its policies - by putting taxes up, by too much interference, too many regulations, too much public spending.'

Another said: 'They talk a good story, yet the reality is more difficult. They produce much hot air.'

The CBI said the tax burden had risen by £54bn in Blair's first two terms in office. But 57% of those surveyed said roads were worse now than last year, seven in ten said the railways were worse, and almost two in five said the NHS was worse.

Jones added: 'The business vote is up for grabs. We will talk to anyone that comes up with ideas to reduce regulation and taxation and gets on with delivering efficiency, productivity and public service reform.

'If we do not see wealth creation and job creation move higher up the agenda it will not please the CBI's members.'

The Conservatives said the survey proved Labour was failing business. Shadow Industry Secretary Stephen O'Brien MP said: 'New Labour has certainly not created the New Britain business wanted to see. This Government has had its hands in its pockets while business investment has collapsed, productivity has slowed, trade has worsened and 2,000 jobs vanish from manufacturing every week.

'After 60 tax rises and no reform, Labour is taxing, spending and failing.'