THE PRESSURE on Alistair Darling increases today with a savage attack on his tax plans from Britain’s small and medium-sized firms.

Ahead of its annual conference tomorrow, the CBI commissioned a survey of small and medium-sized enterprises (SMEs) to gauge opinion both on the capital-gains tax changes the chancellor announced in his prebudget report last month and the impact of the credit crunch.

While the findings of GfK/NOP survey published today on the credit crunch were reassuring, those on the tax changes will make grim reading for Darling, who is expected to be criticised tomorrow in a report by the House of Commons Treasury committee.

Asked about his capital-gains tax changes, which raised the minimum rate for business owners from 10% to 18%, four out of ten of the 500 owners, chairmen and directors of SMEs said it would have a negative impact on their business. That proportion rose to 57% among those who have held equity for more than 10 years.

The biggest objection was to the proposed abolition of taper relief, which rewarded longer-term investors; 85% of those who said the tax changes were negative cited this as the most important factor. “The government’s standing with business has been sorely undermined by the proposed capital-gains tax changes, and there is a lot of damage to be repaired,” said John Cridland, the CBI’s deputy director-general.

“Entrepreneurs are now less inclined to do what they do best: taking risks, investing in ideas and driving the economy forward.”

The damage to the government’s reputation with business is confirmed by the survey, which showed that 70% said it had undermined the government’s approach to enterprise. More than nine in ten said ministers needed to act to restore the government’s commitment to the enterprise culture.

The CBI is pressing the Treasury to try to get some of the tax changes amended ahead of their introduction in April. But Steve Sharratt, head of the CBI’s small-firms council, warned that for many owners it would be too late because the majority were rushing to dispose of their businesses. “It changes people’s views of trust and certainty,” he said. “They think: ‘Where is it going to go next?’ Trust is everything.”

The survey’s findings on the impact of the credit crunch showed that only 12% of firms have so far seen a squeeze on the credit available to them, though 35% expect to see an impact at some stage. Fewer than one in five said credit tightening was affecting or would affect business decisions and plans.

“The credit crunch has not caused funding to small firms to dry up, and the bulk do not think they will be affected,” said Ian McCafferty, the CBI’s chief economic adviser. “However, a minority are feeling the pinch and have started to scale back business plans, while more expect the situation to worsen.”

Darling will address the CBI’s annual conference in London on Tuesday, as will David Cameron, the Tory leader. The two Liberal Democrat leadership hopefuls, Chris Huhne and Nick Clegg, will also address members.

There will be speeches from Steve Schwarzman, head of Blackstone, the private-equity group, and Ben Ver-waayen, BT’s chief executive.

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