CBI urges UK government to ease tax pressure and curb price-gouging rhetoric

Traders Union
All News
Financial News
CBI urges UK to ease tax pressure

All news

Editors' Picks

Crypto News

Financial News

Market Voices

Billionaires

Companies

Broker News

Regulators News

Ashutosh Sureka

20 hours ago

CBI urges UK government to ease tax pressure and curb price-gouging rhetoric — CBI calls for tax relief

Britain's business lobby is pressing the government to avoid further burdens on companies as households and firms face a fresh cost-of-living shock linked to the Iran war. The intervention highlights rising tension between employers and Labour after higher payroll taxes and new warnings over alleged price-gouging.

Highlights

CBI reports business provided 31% of UK tax revenues last year, the highest share since 1998, and urges government not to treat firms as cash cows.
Rachel Reeves' increase in employers' social security contributions after Labour's July 2024 election win cost businesses £27 billion, equivalent to employing 1.3 million young people at minimum wage.
CBI criticizes government rhetoric on price-gouging, warns political instability and accusations of profiteering are undermining business confidence and risking economic stagnation.

Business tax burden and policy dispute

As reported by Reuters, the Confederation of British Industry says companies should not be treated as a "cash cow" as ministers weigh how to respond to mounting economic pressure. The group says 31% of British tax revenues last year came from business, the highest share since comparable records began in 1998.

CBI Chief Executive Rain Newton-Smith says business is not a "cash tap" that can be turned on without consequence and warns that higher taxes will not deliver growth. Her remarks come ahead of the organisation's annual dinner in London.

The relationship between business and the Labour government has worsened since Finance Minister Rachel Reeves increased employers' social security contributions in her first budget after the party's July 2024 election victory. The CBI says that change cost businesses 27 billion pounds last year, which it says is equivalent to employing 1.3 million young people on the minimum wage.

Rising cost pressures and political uncertainty

More recently, Reeves says she is prepared to give regulators extra powers to tackle price-gouging after concerns that heating oil companies raised prices unfairly at the start of the Iran war. The CBI rejects that framing and says it is wrong to suggest businesses are exploiting the situation.

Newton-Smith says the narrative of profiteering is both inaccurate and damaging, adding that many firms are struggling to stay afloat. She also warns that political instability is adding to the strain, saying business cannot afford a summer of stagnation as questions grow over Prime Minister Keir Starmer's authority within the Labour Party.

Our earlier report on the sharp decline in UK entry-level job openings showed how fewer starter roles are narrowing routes into work as the number of young people not in education, employment or training remains high. It highlighted evidence that in some regions there are several Neets for every advertised starter job, raising concerns that a weakening jobs market and shifting hiring practices could hit disadvantaged young people hardest.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.