CBI boss Rain Newton-Smith will today call on the Chancellor to make tough choices to avoid a “Groundhog Day” repeat of last year’s tax-raising budget.
Addressing the CBI’s annual conference, Ms Newton-Smith will warn Rachel Reeves that businesses are concerned that if the wrong choices are made in the Budget, “we risk getting locked in a stop-start economy.”
She will argue that many firms are concerned this year’s Budget will be a repeat of last year’s statement that used business to plug a hole, forcing companies to shoulder £24 billion a year in extra costs.
“One year later, here we are again. A new fiscal gap, billions of pounds wide. More rumours, more U-turns, raising uncertainty. Business holding its breath again. Investment paused, projects on hold again. It feels less like we’re on the move. And more like we’re stuck in Groundhog Day.”
Instead she will urge the government to make hard choices for growth now and “work with business to fix what is broken.”
She will demand Ms Reeves takes bold action on energy costs and changes course on the Employment Rights Bill.
Setting a challenge to government, Ms Newton-Smith will say: “If growth is your priority, prove it – make hard choices for it. Against opposition, against short-term politics. Be it welfare, be it pensions increases – show the markets you mean business.
“All short-term politics leads to is long-term decline… and this country cannot afford another decade of stagnation.
“That means making hard choices for growth now – before they get harder. Having the courage to take two tough decisions rather than twenty easier ones.
“Raising the headroom to make promises stick. It means one or two broad tax rises, rather than death by a thousand taxes. Twenty bad choices don’t make a good system. It means stop being defined by the past – own the challenges of today.”
Rates call
Scottish retailers want the Scottish Government to follow England and Wales which are pressing ahead with permanent rates reductions for shops from April.
The Chancellor of the Exchequer is expected to confirm in her Budget the size of reduction in the business rate that will apply to retailers in England in the coming financial year. The Welsh Government has also announced it will reduce rates for shops.
Scotland’s shopkeepers contribute about a fifth of all business rates and Scotland continues to levy a higher business rate on medium-sized and larger premises than is the case in England.
David Lonsdale, director of the Scottish Retail Consortium, said: “Governments in England and Wales acknowledge the rates burden on retail is disproportionately high and are bringing in permanent rates reductions for the industry from April.
“Unless we see action to reduce business rates for all retailers in Scotland then stores here risk being put at a further competitive disadvantage and potentially materially so.”
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