Chancellor Rachel Reeves Defends Budget Tax Rises at CBI Conference
Chancellor Rachel Reeves has firmly defended the tax increases announced in her recent Budget, telling business leaders she will not return with additional borrowing or taxes. Speaking at the Confederation of British Industry (CBI) conference, Reeves emphasized that her Budget provides the “stability and platform” needed to move forward.
The Budget includes nearly £70 billion in public spending, with over half coming from increased taxes. Businesses are set to bear the brunt of these tax increases, including higher employer National Insurance rates and a lowered payment threshold. This has sparked significant concern among business leaders about the potential impact on investment and economic growth.
CBI leadership expressed strong reservations about the tax measures. Rain Newton-Smith, the CBI’s boss, highlighted that a recent survey found almost two-thirds of 185 companies believe the Budget will damage UK investment. She argued that tax rises directly impact profits, competitiveness, and growth.
Several business leaders shared their concerns. Salman Amin from McVitie’s noted it was becoming harder to justify investing in the UK, while Stuart Paver of Pavers Shoes revealed that tax changes would cost his business £4.2 million and slow down expansion plans. Rupert Soames, CBI chairman, was particularly critical, stating that “business has been milked as the cash cow.”
The tax increases come alongside other challenges for businesses, including higher minimum wages, increased business rates, and new workers’ rights regulations. Major retailers like Tesco, Amazon, and Next have warned about the potential impact, with some suggesting they might need to increase prices to offset additional costs.
Reeves remained resolute, stating that she has addressed financial challenges and put public finances on a firm footing. She emphasized that public services must now “live within their means” and that no further tax increases are planned.
Not everyone views the tax rises negatively. Some argue that asking multimillion-pound companies to contribute more is a fair way to fund essential public services like the NHS.
Conservative leader Kemi Badenoch expressed concern about the increasing tax burden, warning that businesses cannot indefinitely absorb these costs without consequences for everyday people through higher prices or lower wages.
The CBI has called for various reforms to support economic growth, including:
– More flexibility with the apprenticeship levy
– Updates to business rates
– Simplification of the planning system
While Reeves maintains that her Budget provides necessary stability, business leaders remain skeptical about the potential long-term economic implications of these tax increases.
The debate highlights the ongoing challenge of balancing public service funding with business growth and investment in the UK’s economic landscape.
