CBI warns fall in corporate profits could hit pensions and taxes

Any fall in profits at UK firms could threaten pensions, schools and jobs, according to the Confederation of British Industry (CBI).

The CBI says the amount companies earn as a share of the UK’s gross domestic product (GDP) has fallen since 1997, and it has asked Gordon Brown not to do anything that will raise business costs.

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CBI director general, Digby Jones, said: “We have been through a period of profitless prosperity with firms not making as much money as in previous economic upswings,” he said.

“Ministers and voters alike must realise this is not merely a business issue. With a significant proportion of all corporate profits going to pension funds and insurance companies as shareholders, poor profits mean lower pensions, less tax and fewer schools and hospitals.”