CBI boss calls for Reeves to tear up Labour’s pledge not to raise tax

about 11 hours ago

The boss of the Confederation of British Industry has suggested the chancellor should tear up Labour’s manifesto pledge not to raise taxes on working people, in a significant intervention before the budget.Rachel Reeves is widely expected to present a package of tax rises in her 26 November statement to offset deteriorating economic forecasts.However, the chancellor has been hamstrung by Labour’s promise not to increase the three main revenue-raisers for the Treasury: income tax, national insurance and VAT.In a surprise move in the debate about how to raise extra revenue, the CBI’s chief executive, Rain Newton-Smith, says the “time for tinkering is over”.Writing in the Guardian, the head of the longstanding lobby group representing many of the UK’s largest companies warns the chancellor against “slavish adherence” to tax promises made in the run-up to last year’s general election.

She said the pre-election promises have now been overtaken by events.“The fact is that geopolitics and global markets have shifted.The world is different from when Labour drafted its manifesto, and when the facts change so should the solutions,” she writes.“The chancellor cannot raid corporate coffers again so she must look elsewhere, embracing long-term strategic tax reforms rather than maintaining a slavish adherence to manifesto promises on tax or ideas based on the world as it was 18 months ago.”The party’s manifesto states: “Labour will not increase taxes on working people, which is why we will not increase national insurance, the basic, higher, or additional rates of income tax, or VAT.

”As well as suggesting Reeves revisit Labour’s promises on personal taxation, Newton-Smith calls for the reform of business rates, VAT thresholds for small firms and stamp duty.Reeves used her maiden budget last October to announce a £40bn package of tax increases, including a £25bn increase in employer national insurance contributions that was widely criticised by businesses and has been blamed for helping fuel inflation.The chancellor subsequently promised not to return with further tax rises, saying “there’s no need to come back with another budget like this” and “we’ll never need to do that again.”However, the independent Office for Budget Responsibility is widely expected to downgrade its growth forecasts, after a review of its optimistic-looking expectations for productivity.This shift, coming after costly U-turns on welfare reform and the winter fuel allowance, could leave the Treasury looking for £20bn-£30bn in revenue in five years’ time to put Reeves on course to meet her fiscal rules.

Ruth Curtice, the chief executive of the Resolution Foundation thinktank, agreed with Newton Smith that finding £20bn or more within the constraints of the manifesto would be problematic,“Raising that amount without touching taxes that account for three-quarters of the UK’s tax base risks distorting behaviour, loading excessive pain on to small groups, and harming economic growth,” she said,“Manifesto pledges are important, but there’s a point at which they cause more harm than they’re worth,”Reeves has repeatedly emphasised her determination to stick to the pledges in recent weeks, however, as speculation has mounted about potential tax rises,A Treasury spokesperson said: “We are protecting payslips for working people by keeping our promise not to raise the basic, higher, or additional rates of income tax, employee national insurance, or VAT.

”As well as calling for tax changes, Newton-Smith also reiterates the CBI’s concerns about the government’s employment rights legislation, which she argues is deterring firms from hiring,Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionAngela Rayner was widely viewed as the champion of the employment rights package inside government and lobbying from business groups to water down aspects of the bill has intensified since Rayner’s resignation last week,“The employment rights bill in its current form will add cost and complexity, is already leading some firms to put hiring plans on ice, and risks making it even harder to bring people back into work,” Newton Smith says,The bill includes immediate protection from unfair dismissal, after a yet-to-be determined probationary period, the right to regular hours, and the right for unions to access workplaces,Union leaders gathering in Brighton for the TUC conference on Tuesday said Labour had sought to issue reassurances that the party was still committed to the landmark bill.

The education secretary, Bridget Phillipson, who is standing in the contest to succeed Rayner as deputy Labour leader, told delegates on Tuesday: “One year ago we were elected to deliver this employment rights bill, and congress that is what we will do.We will not accept any watering down by the Lords.Forward with the employment rights bill in full.No ifs, no buts.”One union leader said ministers risked blowing up relations with the labour movement at a difficult moment for the government, and would need to retain its workers’ rights plan to show a key point of difference with Nigel Farage’s Reform.

“They are not going to want to go to party conference fighting with us,” the leader argued.Mike Clancy, the general secretary of the Prospect trade union, said the government reshuffle had created “anxiety” at the Brighton conference, but that he believed Labour would push ahead with a policy that sought to bridge business and union demands.“We need to take business with us on this journey, the re-regulation of the labour market is necessary and not up for debate, but, you know, we know what it’s like to have been on the wrong end of getting things done to us for 14 years.”Keir Starmer carried out a wide-ranging reshuffle in the wake of Rayner’s departure, partly aimed at bolstering the government’s growth agenda.At Tuesday’s cabinet meeting, the prime minister told colleagues they should be ready to “move from fixing the foundations to driving forward the growth and national renewal that delivers for working people”, according to a readout from his official spokesperson.

The Treasury has been approached for comment.

cultureSee all

‘The Mother Teresa of Aussie supermarkets’: meet the woman cataloguing grocery deals on TikTok

Maya Angelou once said “a hero is any person really intent on making this a better place for all people” and when she said that, I can only assume she had Australian TikToker and micro-influencer Tennilles_deals in mind.Who exactly is Tennilles_deals? Firstly, she’s the Mother Teresa of Aussie supermarkets. Secondly, I don’t know anything about her personally because this savvy queen doesn’t market herself like your average influencer. She lets her work speak for itself.The work in question? Weekly uploads of POV-style videos where Tennille meticulously goes through major supermarkets to show you what’s on special that week

2 days ago

Drawings reveal Victorian proposal for London’s own Grand Central station

The vaulted arches of New York’s Grand Central station are recognisable even to those who have never taken a train into the Big Apple. But they could very easily have been a sight visible in central London.Shelved 172-year-old architectural drawings by Perceval Parsons show how he envisioned a new London railway connecting the growing number of lines coming into the city to a huge main terminal by the Thames.The drawings of London’s own Grand Central Station, which are being put on open sale for the first time to mark the 200th anniversary of the first public passenger railway, show a scheme that would have given the capital of the UK a very different look today.The station was to be located at Great Scotland Yard, close to the modern-day Embankment tube station, and would have boasted an ornamental frontage about 800ft (245 metres) in length

3 days ago

Blur’s Dave Rowntree: ‘People think music was better in the old days, to which I say: bollocks!’

You’ve just put out a coffee table book of photographs of your early years with Blur. I imagine you didn’t have too many expectations at the time. Why had you stopped taking photos by the time the band blew up?I told myself that I was not experiencing life, that I was looking at it through the lens of the camera. But what really happened was, after a few years, things stopped being bright and shiny and new and exciting. It was pretty clear that we were going to have a career, that this wasn’t just a 15-minute Warholian burst of fame

3 days ago

Gems review – dazzling technique elevates LA Dance Project’s contemporary ballet trilogy

Australia sees so little international contemporary dance – considered too far and too expensive a journey, with too small a dedicated dance audience to make it worthwhile. What does appear is mostly in Melbourne and Sydney. So it’s a curious coup for Brisbane festival to land the second visit to Australia by L.A. Dance Project – the troupe founded by the former New York City Ballet principal Benjamin Millepied – after the Sydney Opera House’s presentation of his contemporary, genderqueer Romeo and Juliet Suite last year

4 days ago

The Guide #207: How Britain embraced The Simpsons, America’s true first family

Mum wouldn’t have Bart Simpson in our house. When, 35 years ago this month, The Simpsons first drifted across the Atlantic and on to UK screens, they brought with them a bad reputation. In the US, Matt Groening’s peerless animation had quickly become a ratings sensation after it debuted in 1989, but it was also a controversy magnet, particularly over its breakout delinquent star. The Simpsons was seen by the more conservative end of the US media as a bad influence on kids (a viewpoint famously echoed by President George HW Bush a few years later with his call for American families to be more like the Waltons and less like the Simpsons). Plenty of US schools banned a massive-selling T-shirt with Bart declaring himself an “underachiever and proud of it, man”

4 days ago

From On Swift Horses to David Byrne: your complete entertainment guide to the week ahead

ChristyOut now Following a prize-winning premiere at the Berlinale, this Irish drama starring Danny Power has been feted as an auspicious feature debut for director Brendan Canty. Telling the tale of two estranged brothers in Knocknaheeny, Cork, it’s a social-realist breakout hit.On Swift HorsesOut now Muriel (Daisy Edgar-Jones) and Lee (Will Poulter) are newlyweds who move from Kansas to California in the 1950s, with Lee’s brother, Julius (Jacob Elordi). A bond emerges between Muriel and Julius – however, this isn’t a typical love triangle, but an exploration of same-sex attraction in a time and place where that could be life-threatening.The Conjuring: Last RitesOut now Something wicked this way comes: the ninth and (allegedly) final instalment of the Conjuring franchise, based on the (alleged) exploits of paranormal experts Lorraine and Ed Warren, played by Vera Farmiga and Patrick Wilson, who are investigating the Smurl hauntings of Pennsylvania

4 days ago

technologySee all