UK Business Leaders Push for Bold Budget Moves

CBI Chief Criticizes Lack of Business Involvement

The Confederation of British Industry (CBI) chief, Rain Newton-Smith, will criticize Finance Minister Rachel Reeves for excluding businesses from key discussions on energy costs and labor reforms. She advocates for fewer, significant tax hikes instead of many small ones that could harm the economy.

Economic Growth Stagnation and Tax Increases

The UK's economy has grown slowly since the 2007-08 financial crisis. Reeves and Prime Minister Keir Starmer promised change when Labour returned to power in 2024. However, Reeves is expected to raise taxes by tens of billions to meet borrowing targets and increase welfare spending. While income tax is unlikely to rise, other taxes will.

Collaboration Needed on Energy and Employment

Newton-Smith praised the government's plans for industry, trade, and infrastructure but stressed the need for collaboration with businesses on energy costs and employment rights. She also warned that changes to pension schemes could make hiring more expensive for employers.

Energy Price Cuts and Business Concerns

Business Minister Peter Kyle announced a plan to cut energy prices by up to 25% for around 7,000 manufacturers starting in 2027. Kyle promised more actions to address business concerns. However, Stephen Phipson of Make UK argued that the scheme needs to be expanded for real impact.

UK Energy Costs Compared to International Competitors

Last year, large UK energy-intensive companies paid about four times more for electricity than US businesses. They also paid more than double what competitors in France and Germany paid, according to the International Energy Agency.