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By Sally Watson, 9 November 1999 18:24

NEWS The Chancellor of the Exchequer, Gordon Brown, announced cuts in capital gains tax in his pre-Budget report to the House of Commons today. The Chancellor's speech contained a number of measures designed to boost UK start-ups, including a reduction in the current level of Capital Gains Tax (CGT) from 40 per cent to 22 per cent for a three-year investment, and 10 per cent for a five-year investment. "We want to build a pro-investment, pro-competition, pro-enterprise Britain," claimed Brown. "Britain has only half the rate of business start-ups and share ownership of the US." The package of measures also includes tax cuts for companies investing in smaller businesses and making employee share schemes of less than around £7,500 in value, tax free if held for five years. But industry reaction was muted. Ian McDade, tax partner at PricewaterhouseCoopers, said there were no surprises in the speech. "Most of what was there had already been leaked," he said. McDade pointed out that incentives like the reduction in CGT and tax relief on share schemes are welcome, but don't go far enough. "The government is taking a step in the right direction but there is nothing very bold," he said. Richard Baron, deputy head of the policy unit at the Institute of Directors, welcomed the report but was disappointed there was no relaxation of regulation. "We like it," he said, "but we would have liked it to go further. It is good that the Chancellor is focusing on business but the downside is regulation. It's the government's job to burn red tape."