The shadow chancellor, Michael Portillo, has hit out at the government's e-business policy, accusing it of increasing the tax burden and wrapping the new economy in red tape.
Speaking at a Net Group reception for e-business, he accused Tony Blair of using press stunts to display his e-friendliness, while quietly bringing in new e-taxes through the back door.
Portillo said Britain does not need Blair's warm words or new taxes.
He said IR35 was a tax on IT entrepreneurs and BN2J, introduced in this year's Budget, which taxes multinationals that establish a head office in the UK, encourages big businesses to locate anywhere other than Britain.
"To encourage e-business to prosper in Britain, we must establish an investor-friendly climate. That means low tax and light regulation, but we're going in the wrong direction. This is a big risk to take when businesses of the new economy can get up and go overseas," Portillo said.
Portillo also claimed the government dragged its feet over selecting the right person to become an e-envoy, and not acting quickly enough on e-signatures.
"So far we have had heavy-handed regulation where a light touch is needed, and undue delay where speed is of the essence," he said.
A Department of Trade and Industry representative said: "It sounds like Portillo has picked up a very old briefing. The tax burden is falling and is lower than it was under the last government. Last year it was 37.4 per cent. This year it's 37 per cent, and next year it will be 36.8 per cent."
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