High taxes are leaving struggling businesses at a ‘tipping point’ amid dire concerns Labour is treating them as a ‘cash tap’, the Confederation of British Industry (CBI) will warn.
In a stark speech today, Rain Newton-Smith, chief executive of the business lobby group, will insist that Britain’s private sector, also being battered by the global effects of the Iran war, cannot take any more cost pressures.
And the head of Britain’s biggest business group will sound the alarm over Labour’s civil war, which is leaving the economy ‘holding its breath’, denting confidence and investment and threatening a ‘summer of stagnation’.
In a speech at the CBI’s national business dinner in London, Ms Newton-Smith will say: ‘Business is not a cash tap that can be turned on without consequence.
‘Adding to the burden now would have serious consequences. You cannot tax your way to growth and we must not try.’
It comes after a tranche of Government files this week revealed how MPs want to squeeze more taxes from firms and businesses.
In messages released as part of the Mandelson Files, senior Cabinet minister Pat McFadden admitted that MPs were constantly asking him: ‘Who can we tax in order to pay benefits to others?’
In a stark speech today, Rain Newton-Smith (pictured), chief executive of the business lobby group, will insist that Britain’s private sector cannot take any more cost pressures
Yet businesses are already buckling under the pressure of hikes in employer National Insurance (NI) contributions, increase in the minimum wage, a raft of new workers’ rights, bungled rates reform and soaring energy bills.
CBI figures show taxes paid by businesses hit record levels last year of £345billion, including £27billion from Labour’s NI raid.
‘That is not free money,’ Ms Newton-Smith will say. ‘It is not free of consequence. You cannot fix the cost of living without fixing the cost of doing business.
‘And the cost of doing business is reaching a tipping point.’ And on Labour’s leadership turmoil, she will add: ‘The challenges in our economy won’t fix themselves while politicians look inwards.
‘Big decisions need taking. The world is moving fast – it will not wait. We need a government that is getting on with governing.
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‘Business cannot afford a summer of stagnation while the politics play out. ‘There is a real, material cost to what’s happening in Westminster now.’
The CBI’s findings show that business taxes grew by 13 per cent in the latest financial year – faster than the 9 per cent overall increase in taxes.
That has helped make UK firms less profitable than any time since the financial crisis in 2008.
‘The business leaders I meet are fighting to keep their firms afloat and deliver for their customers,’ Ms Newton-Smith will say.
‘They may look calm, but they are paddling furiously beneath the surface – absorbing costs, protecting jobs and trying to keep investing in uncertain times.’
She will also say that Left-wing claims of ‘profiteering and price-gouging’ by businesses are ‘wide of the mark’ and ‘deeply damaging’, adding: ‘Confidence is the elixir of growth. And right now, it’s in short supply.
‘We can’t control global events, but governments must not add to the pressure. Either by talking down the UK’s capabilities, or pushing up the burden on business.’
