Rachel Reeves has been ordered to stop talking Britain down (Image: Getty)
Employers are demanding Chancellor Rachel Reeves stop talking Britain down as they warned her gloomy message about the state of the economy was costing jobs.
CBI Chief Executive Rain Newton-Smith and Chief Economist Louise Hellem have written to the Chancellor ahead of the October 30 Budget saying: “We recognise the difficulty of the UK’s present economic and fiscal situation, but we believe in the importance of hope, vision and laying out a path to prosperity to take us through the difficult decisions needed in this Budget.”
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They warned: “Confidence is central to investment decisions and above all, we must focus on retaining competitiveness and certainty at the heart of economic policy.”
Last week the Institute of Directors (IoD) told the Chancellor that concern about possible increases to capital gains tax or inheritance tax, or new taxes on pension contributions, “has led some to pause some of their investment and hiring plans, and others to reconsider the UK as a location for their business.”
Fears that employers will be hit by tax rises were stoked again last week after Prime Minister Sir Keir Starmer refused to rule out increasing National Insurance contributions paid by firms.
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Prime Minister Sir Keir Starmer claimed in August that the Labour Government had inherited “a ￡22billion black hole in the public finances” and warned “there’s a budget coming in October and it’s going to be painful”.
The Chancellor has also said that “difficult decisions” lie ahead on spending, welfare and tax. It's meant two months of uncertainty before measures are confirmed.
Possible tax hikes that could feature in the Budget include: Increasing capital gains tax on the sale of second homes and businesses Charging National Insurance on employer pension contributions Ending or cutting tax-free access to pension pots Increasing inheritance tax or including more gifts as inheritance Allowing the current freeze in fuel duty to end
In addition, the Chancellor could change fiscal rules so that the government can borrow up to ￡60bn more, stoking fears of an increase in inflation and interest rates although business groups such as the IoD would welcome an increase in infrastructure investment.
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Jonathan Geldart, IoD Director General, said: “The weakness in the UK economy is perhaps unsurprising given the cluster of shocks from recent years. But this unfortunately leaves us with public spending and taxation at post-war highs as a percentage of GDP.
“The sustainability of the public finances is rightly a key priority but we need to shift the focus away from short-term budget management to creating the stable, light-touch long-term policy framework which is desperately needed to get behind stronger growth.”
DON'T MISS
Powered by
Labour is killing the economy and it hasn't even got started yet!
1321 Comments
Labour will have to hike taxes to raise ￡25 billion, warn economists
37 Comments
Rachel Reeves blamed as UK ‘abandoned by more millionaires than anywhere else in world'
96 Comments
Warning over Rachel Reeves' National Insurance worker pension 'tax on jobs'
3 Comments
Rachel Reeves sent dire warning her plan risks completely 'screwing up' economy
27 Comments
Keir Starmer issued blunt warning that latest ‘￡18bn tax raid' will backfire spectacularly
91 Comments
Rachel Reeves planning up to ￡40bn of tax rises and spending cuts in Budget
718 Comments
Labour civil war as Rachel Reeves battles cabinet members over UK's ￡100bn black hole
1519 Comments
Rachel Reeves gives biggest hint yet on what she's plotting to fill UK '￡22bn black hole'
461 Comments
What inflation falling means for your money - from state pension to mortgages
5 Comments
Rachel Reeves is using 'bogus' ￡40bn blackhole to hike up taxes
41 Comments
Huge blow to Rachel Reeves as pound hits two-month low after shock inflation drop
1155 Comments
Rachel Reeves will 'breach' Labour manifesto promise with national insurance change
46 Comments
Rachel Reeves under pressure to change tax thresholds after state pension rise
64 Comments
Rachel Reeves warned she risks derailing fragile economic recovery with high-tax Budget
61 Comments
Robert Jenrick issues blistering takedown of Labour's 'biggest betrayal'
35 Comments
Keir Starmer squirms as BBC reporter grills him over new tax hike threat
583 Comments
Angela Rayner among Labour ministers furious as 'biggest tax raid in history' mooted
14 Comments
Financial chief fears Rachel Reeves budget could repeat Liz Truss market chaos
3 Comments
Rachel Reeves' dead hand economics and how she is digging a hole for herself
93 Comments
Labour is killing the economy and it hasn't even got started yet!
1321 Comments
Labour will have to hike taxes to raise ￡25 billion, warn economists
37 Comments
Rachel Reeves blamed as UK ‘abandoned by more millionaires than anywhere else in world'
96 Comments
Warning over Rachel Reeves' National Insurance worker pension 'tax on jobs'
3 Comments
Rachel Reeves sent dire warning her plan risks completely 'screwing up' economy
27 Comments
Keir Starmer issued blunt warning that latest ‘￡18bn tax raid' will backfire spectacularly
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Rachel Reeves planning up to ￡40bn of tax rises and spending cuts in Budget
718 Comments
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1519 Comments
Rachel Reeves gives biggest hint yet on what she's plotting to fill UK '￡22bn black hole'
461 Comments
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5 Comments
Rachel Reeves is using 'bogus' ￡40bn blackhole to hike up taxes
41 Comments
Huge blow to Rachel Reeves as pound hits two-month low after shock inflation drop
1155 Comments
Rachel Reeves will 'breach' Labour manifesto promise with national insurance change
46 Comments
Rachel Reeves under pressure to change tax thresholds after state pension rise
64 Comments
Rachel Reeves warned she risks derailing fragile economic recovery with high-tax Budget
61 Comments
Robert Jenrick issues blistering takedown of Labour's 'biggest betrayal'
35 Comments
Keir Starmer squirms as BBC reporter grills him over new tax hike threat
583 Comments
Angela Rayner among Labour ministers furious as 'biggest tax raid in history' mooted
14 Comments
Financial chief fears Rachel Reeves budget could repeat Liz Truss market chaos
3 Comments
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93 Comments
Labour is killing the economy and it hasn't even got started yet!
1321 Comments
Labour will have to hike taxes to raise ￡25 billion, warn economists
37 Comments
Rachel Reeves blamed as UK ‘abandoned by more millionaires than anywhere else in world'
96 Comments
Warning over Rachel Reeves' National Insurance worker pension 'tax on jobs'
3 Comments
Rachel Reeves sent dire warning her plan risks completely 'screwing up' economy
27 Comments
Keir Starmer issued blunt warning that latest ‘￡18bn tax raid' will backfire spectacularly
91 Comments
Rachel Reeves planning up to ￡40bn of tax rises and spending cuts in Budget
718 Comments
Julian Jessop, Economics Fellow at the free market think tank, the Institute of Economic Affairs, said: “Worries about the tax burden and the Government’s other plans on everything from energy policy to employment rights are dampening business and consumer confidence and delaying investment and recruitment. The prospect of another surge in government borrowing is now starting to spook Investors in the bond market too.
“The Chancellor will therefore still have to tread very carefully to ensure that the Budget does not derail the recovery.”