Rachel Reeves to budget concerns on tax tiles at CBI

Rachel Reeves to budget concerns on tax tikes at CBI
Credit: Tayfun Salcı/Zuma/Rex

London (Parliament Politics Magazine) – Chancellor Rachel Reeves will defend her tax-raising budget at the CBI conference, arguing no alternatives have been proposed, as firms warn the ÂŁ25bn employer tax rise could harm investment and job creation. 

In her address on Monday, Rachel Reeves will respond to critics of her tax-hiking budget, telling business leaders that they have offered “no alternatives” to her proposals. 

After Labour’s first budget in 14 years, business groups have expressed concerns that the ÂŁ25bn hike in employer national insurance contributions (NICs) could lead to job cuts and increased prices. Thousands of farmers have also been protesting against changes to inheritance tax.

At the Confederation of British Industry (CBI) annual conference in London, Chancellor Reeves will insist that no alternative proposal has been presented to address the challenges left by the former Conservative government. 

She is expected to say “I have heard lots of responses to the government’s first budget but I have heard no alternatives.” 

“We have asked businesses and the wealthiest to contribute more. I know those choices will have an impact. But I stand by those choices as the right choices for our country: investment to fix the NHS and rebuild Britain, while ensuring working people don’t face higher taxes in their payslips.”

On 30 October, the Chancellor’s budget outlined ÂŁ40bn in tax rises to support public spending, with the key contributions coming from the higher employer NICs. 

As reported by the BBC, the Chancellor will use this speech as an opportunity to respond to criticism. 

Rain Newton-Smith, the CBI’s director-general, will praise Reeves’s attempts to stabilise public finances in her speech but will warn that the recent measures have made it harder for businesses to “take a chance” on new hires.

Newton-Smith will say, “When you hit profits, you hit competitiveness, you hit investment, you hit growth. Almost two-thirds of 185 firms told us this budget will damage UK investment.”

Highlighting corporate frustration over the sudden tax hike, she will assert state, “Tax rises like this must never again be simply done to business. That’s the road to unintended consequences.”

Ms Newton will urge the government to continue with business rates reform to ease the burden on struggling companies, while also advocating for tax incentives for occupational health to support workers with health conditions in staying employed. 

Rachel Reeves claim that critics have proposed “no alternative” to her tax plans will likely remind some of Margaret Thatcher’s 1980 remark at the Conservative Women’s Conference while defending her economic policies, “I believe people accept there’s no real alternative.” 

Thatcher’s frequent use of the phrase led her cabinet critics to nickname her Tina, an acronym for “There is no alternative.”

During the election campaign this year, Labour committed to avoiding increasing key personal taxes, including national insurance, income tax, and VAT. 

However, after the Labour’s victory, Reeves revealed that the public finances were left with a ÂŁ22bn “black hole,” stressing the need for decisive action to manage borrowing. 

Reeves will add more in the speech at CBI, “We had to clear up the mess of what we had been left. The easiest thing I could have done is to have dodged the difficult choices. Put short-term interests before the national interest. I was not willing to do that.”

Reeves will assert that Labour has no plans to impose tax hikes of this scale in future years. 

She will also express her dissatisfaction with the growth figures, saying “I am not satisfied.”

Mel Stride, the shadow chancellor, has blamed Reeves’s budget for threatening the economy stating, “Labour’s national insurance jobs tax will make it more expensive for businesses, which will then fuel higher prices, higher inflation, higher mortgage costs and slower growth.”

Chancellor Reeves’s serious tone at the CBI speech seems to be in contrast with Boris Johnson’s speech at the same conference three years ago when he spoke about the merits of children’s theme park Peppa Pig World.

Daniele Naddei

Daniele Naddei is a journalist at Parliament News covering European affairs, was born in Naples on April 8, 1991. He also serves as the Director of the CentroSud24 newspaper. During the period from 2010 to 2013, Naddei completed an internship at the esteemed local radio station Radio Club 91. Subsequently, he became the author of a weekly magazine published by the Italian Volleyball Federation of Campania (FIPAV Campania), which led to his registration in the professional order of Journalists of Campania in early 2014, listed under publicists. From 2013 to 2018, he worked as a freelance photojournalist and cameraman for external services for Rai and various local entities, including TeleCapri, CapriEvent, and TLA. Additionally, between 2014 and 2017, Naddei collaborated full-time with various newspapers in Campania, both in print and online. During this period, he also resumed his role as Editor-in-Chief at Radio Club 91.
Naddei is actively involved as a press officer for several companies and is responsible for editing cultural and social events in the city through his association with the Medea Fattoria Sociale. This experience continued until 2021. Throughout these years, he hosted or collaborated on football sports programs for various local broadcasters, including TLA, TvLuna, TeleCapri, Radio Stonata, Radio Amore, and Radio Antenna Uno.
From 2016 to 2018, Naddei was employed as an editor at newspapers of national interest within the Il24.it circuit, including Internazionale24, Salute24, and OggiScuola. Since 2019, Naddei has been one of the creators of the Rabona television program "Calcio è Passione," which has been broadcast on TeleCapri Sport since 2023.