One of the UK’s key business organisations will accuse Labour of sending British industries towards a “tipping point” after extracting billions of extra pounds in increased taxes.
In a planned speech to business leaders on Thursday, the director general of the Confederation of British Industry (CBI), Rain Newton-Smith, will point out record tax take is not “free money” and urge the government not to place further burden on companies.
“Last year, the government tax take from business was the highest on record. National Insurance alone rose nearly 28pc on the year before – almost £27bn extra, taken from business,” Newton-Smith is to say, according to the Times.
“That is not free money. 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.
“Business is not a cash tap that can be turned on without consequence, and adding to the burden now would have serious consequences. You cannot tax your way to growth – and we must not try.”
Newton-Smith, who previously worked at the Bank of England and Barclays, is also to say claims from the government over firms “profiteering” from the Iran war were “damaging” and risks undermining the nature of businesses existing to make a profit.
Chancellor Rachel Reeves is expected to give opening remarks at the event but not stay for the dinner, when Newton-Smith is slated to deliver her own speech. Darren Jones, chief secretary to Keir Starmer, will be in attendance.
“The narrative of profiteering and price gouging is not just wide of the mark – it’s deeply damaging,” Newton-Smith will say.
“Business leaders don’t get out of bed to rip people off. They get out of bed to roll up their sleeves and make things better.
“But there’s a deeper point which all our politicians need to understand. Profit is not a dirty word. It’s essential.
“Rachel Reeves should focus on fixing the economic problems she has created, not shifting the blame onto private companies.”
Research from the British Chambers of Commerce (BCC) suggests UK economic growth will stay lower than expected across 2026 and 2027, in no small part due to the impact of the Middle East conflict.
The BCC is predicting weak business investment, higher inflation and falling exports, said a report this month, with UK GDP expected to grow only 0.9 per cent in 2026, 1.0 per cent in 2027, and 1.3 per cent in 2028.