Business groups back Tory National Insurance plans

• Britains main business groups have waded into the row over Labour plans to increase National Insurance.
  
  The British Chambers of Commerce, the CBI and five other organisations said the Tories "deserved credit" for their opposition to the planned increase.
  
  Earlier, 23 company bosses had spoken out in favour of the Tory position.
  
  The Tories said No 10 was "at war with business" but Labours Lord Mandelson said the businessmen were victims of "cynical deception" by the opposition.
  
  "Of course there are some in business who are going to support what appears to be a pain-free tax cut. I mean, who wouldnt, if offered that?," he added.
  
  "But the point is, this is not pain-free and Mr Cameron and Mr Osborne are peddling a deception."
  
  The two parties have been trading blows over whose tax plans are better for the economy - just days before Gordon Brown is expected to call the general election.

  This followed the publication of a letter by the bosses of many of the UKs best-known companies - including Marks and Spencer, Sainsburys and Diageo - backing the Tories pledge to scrap part of the planned NI increase should they win power.
  
  The executives said the tax rise - due to come into effect in April 2011 - would hit business and jobs.
  
  Tory leader David Cameron said the intervention was a "very significant moment" while shadow chancellor George Osborne claimed the "business community had come together to reject Labours tax on jobs".
  
  "Gordon Brown now finds himself increasingly at war with British business - he is part of the problem not the solution," he said.
  
  But Labour said the businessmen - some of whom have prior links to the Tories - had been taken in by their opponents but several of the signatories hit back, saying such claims were "patronising".
  
  Seven business organisations - representing both large and small firms - have now joined in the dispute, also backing the Conservatives position.
  
  Negative impact
  
  In their own letter, the organisations said they "applauded the public stand" taken by the businessmen in criticising the NI rise, describing it as "clear and unequivocal tax on jobs".
  
  "Britains leading business organisations, representing hundreds of thousands of companies and millions of employees, stand with them in their fight," they wrote.
  
  "Recent proposals by the Conservatives to reduce the negative impact of the rise on companies and their hard-working employees deserve some credit.
  
  "Given that all political parties are counting on the private sector to drive future economic growth, it is only right to look for ways to improve the business environment through cost savings across the public sector."
  
  Adam Marshall, from the British Chambers of Commerce, said the organisations accepted difficult decisions had to be taken to cut borrowing and they were "ready to have a conversation" with government about how to do so.
  
  But he told the BBC a National Insurance rise was like an "iceberg" for businesses: "You cant put a tax on jobs as a starter for then," he said.
  
  Not painless
  
  The Tories have said they will pay for the tax pledge by cutting about £6bn in government waste and bureaucracy in 2010-11.
  
  Labour say its opponents sums do not add up and the pledge does not square with the Tories long-stated desire to make cutting the deficit its number one priority in government.
  
  Business Secretary Lord Mandelson has said the Tories cannot achieve their plans without increasing VAT, as he said the Conservatives had done after winning elections in 1979 and 1992.
  
  He compared shadow chancellor George Osborne to "a kid in a sweet shop, who thinks he can just grab sweets from every jar without paying for them".
  
  Lib Dem Treasury spokesman Vince Cable said the National Insurance increase was a "bad tax" that was "damaging" but he added: "I dont think there is anything that any credible opposition party can do to reverse it, given the extreme nature of the financial crisis."
  
  He added: "We are all in favour of efficiency in government but they themselves (the Conservatives) have ridiculed suggestions from the Labour government that you can make large scale, easy savings in that way."
  
  BBC Political Editor Nick Robinson said the Tories regarded the business leaders letter "as a pre-election coup" but it was "impossible for anyone to know whether the government or the Tories will realise the savings theyre aiming for".
  
  The business organisations which have signed the new letter are: British Chambers of Commerce; British Retail Consortium; Confederation of British Industry; Forum of Private Business; Federation of Small Business; Institute of Directors; Recruitment and Employment Federation.

  
  Source: BBC News