LIVERPOOL: Having been badly burned by the British government’s major tax-raising budget last year, business leaders told ministers at the ruling Labour Party’s annual conference that they could no longer afford to foot the bill for fixing the country’s budgetary black hole.
Labour touted itself as the party of business prior to last year’s election, but it shattered that relationship when it launched the biggest tax hikes in more than 30 years, including adding to the payroll costs of employers, in its first budget last October.
Finance minister Rachel Reeves said at the time that tax rises were needed to plug a fiscal hole left by the last government, but nearly a year on, ministers are again expected to need to raise tens of billions of pounds in their next budget, on November 26.
That has made companies wary, and new business minister Peter Kyle acknowledged that “this government does need to reassure business, not through rhetoric but through action, that we will deliver for them.”
“I accept that we are not where we wanted to be at the speed at which we wanted to get there,” he said at a Social Market Foundation event, adding he would have “a sense of urgency” in improving the situation for business.
Two people who attended a reformatted Labour business event said it was a big improvement on last year, after an overhaul designed to give businesses more facetime with ministers. They said there were lots of ministers who were in listening mode, even if key details of policy plans remained scarce.
But another major European company declined to attend the event, which cost 5,000 pounds ($6,715), after finding that previous engagement events were not value for money.
Business representatives at the conference said it would take action at the budget to restore confidence, rather than an engagement event, with one source at a FTSE 100 company saying there was a palpable effort to reconnect with businesses but it would mean nothing if they got the budget wrong.
The Confederation of British Industry also expressed concern that a new workers’ rights bill might act as a barrier to hiring. In a keynote speech on Monday, Reeves conceded that there were “still too many obstacles in the way for businesses”, and reiterated the need for fiscal discipline in the face of calls from some in her party for higher spending.
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