Don’t ask business to ‘shoulder more burden’, CBI chief urges

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Political Reporter

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The government's tax hikes will squeeze profits, damage investment and "hit growth", according to the chief executive of the Confederation of British Industry (CBI).
In last month's Budget, the government announced tax rises worth £40bn, including an increase to employers' national insurance and changes to the threshold at which the levy must be paid.

The government should not “ask businesses to shoulder any more of a burden”, the Confederation of British Industry (CBI) chief has warned in the wake of the welfare cuts.

Work and pensions secretary Lilz Kendall announced on Tuesday a raft of welfare measures she said will help bring more working age people back into jobs.

The changes are set to save the taxpayer more than £5bn a year in 2029-30, she said, with tighter eligibility for personal independence payments (PIP) to account for the largest chunk.

The government has also announced it will pass legislation to deliver a so-called ‘right to try”, which Kendall argued would ensure people are able to “take the plunge and try work – without the fear this will put their benefits at risk”.

Ministers added they would invest an additional £1bn a year by 2029-30 to help support people into work, including through one-to-one help.

Responding to the government’s new green paper on the changes – inviting consultation on the issues – work and pensions committee chairwoman Debbie Abrahams stressed the need for firms to be “receptive to the changing needs of a more diverse labour market.”

She added: “With a stagnant disability employment gap of 28 per cent, we need to do much better.”

But Rain Newton-Smith, chief executive of the CBI, stressed that the government needed to avoid overburdening businesses any further, in light of the added tax burden from Rachel Reeves’ national insurance contributions (NICs) rise, and the employment rights package.

She told BBC Radio 4’s Today programme: “We will hold the Chancellor to account on what she has said, and what she has told us, that she will not increase that burden on business any further.”

Newton-Smith said: “If we want to see growth in our economy, if we want to help those two million young people back into work, we need to not make it more costly or risky to hire people.”

She added: “We know the government are listening on many areas that we have said are hugely important, and there is no more important time, I think, for our economy than when we look to the spring statement next week.”