Business veterans warn UK tax creep could stall investment

John Caudwell and Lord Stuart Rose have put their names to a new open letter that accuses the government of a "creep of taxes" on companies and high‑net‑worth individuals. The petition, organised by the entrepreneur network Helm, also bears the signatures of former Pimlico Plumbers chief Charlie Mullins and Gail’s Bakery chairman Luke Johnson. It calls on the Labour administration to stop rolling out fresh levies on dividends, capital gains and business assets.

The open letter and its signatories

Lord Rose, who previously chaired Asda and Marks & Spencer, warned that “I have never been more concerned about the cost of doing business”. He added that the combination of higher taxes and tighter regulation has become a “serious impediment to growth and employment”. Citing former Chancellor Rachel Reeves’s £25 billion tax package introduced in late 2024, Rose said a single supermarket felt the impact of Employers’ National Insurance at roughly £100 million a year.

Employers’ National Insurance alone took £100m a year out of one supermarket.

Caudwell, a long‑time donor to Labour, told the Telegraph that he doubts the party is “electable” after the recent tax hikes.

Why the tax debate matters

The letter arrives just days before Chancellor John Healey is due to deliver his budget on 28 October. Healey has promised “breathing space” for firms after a wave of tax increases under the previous chancellor. Economists warn that the cumulative effect of these measures could dampen investment, a concern echoed by the Institute of Economic Affairs (IEA). Its former chief, Tom Clougherty, said the tax system has become “a greater threat to enterprise and initiative today than at any point in the last 35 years”.

Research cited by the IEA shows that levies on investment have risen by about ten percentage points since the 2008 financial crisis, while personal‑income tax now accounts for 51 percent of government revenue, up from 44.5 percent in 2000. The accountancy body ICAEW notes that the HMRC handbook has more than tripled in size, making compliance increasingly burdensome for firms.

Looking ahead to the budget

Analysts expect the upcoming budget to address the business community’s concerns, potentially by scaling back planned increases or offering targeted reliefs. A softer tax stance could help restore confidence and revive stalled investment projects, while a continuation of the current trajectory may deepen the slowdown already evident in corporate earnings.

For a broader view of how tax policy is shaping the business environment, see the Treasury’s recent review of business rates for pubs and hotels here.