Budget must support not hamper business – Chamber

Business leaders in Greater Birmingham today warned hitting businesses with further taxation would be “unequivocally the wrong move” – after Chancellor Rachel Reeves refused to rule out more rises.

In a news conference yesterday, the Chancellor said she will make “necessary choices” in this month’s Budget, which could include an income tax increase.

In a speech intended to frame the tough choices about tax in the budget, she said: “As chancellor, I have to face the world as it is, not the world that I want it to be.

“And when challenges come our way, the only question is how to respond to them, not whether to respond, or not.”

Greater Birmingham Chambers of Commerce said further tax rises would be yet another blow to businesses who are already struggling with mounting cost pressures.

Emily Stubbs (pictured), head of policy at the GBCC, said: “With speculation rife, Rachel Reeves had no choice but to lay the groundwork for the ‘necessary choices’ she will be making in her upcoming budget to fill the government's fiscal black hole and regain her economic headroom.

“Amongst those choices, it seems, will be both spending cuts and further tax increases. The Chancellor gave no indication of which taxes might be raised, but it seems that a further freeze on personal allowances, and an increase in income tax - contrary to Labour's manifesto - may be on the cards. 

“For those in employment, the latter could be offset by a decrease in National Insurance, though self-employed individuals and pensioners would be left to feel the full effects.

“Businesses share the Government's stated ambition to drive economic growth and boost productivity.

“However, they are unable to act on that ambition under the weight mounting cost pressures.

“Our latest data shows that Greater Birmingham businesses have downgraded their investment plans in Q3, following a sustained decline in cashflow throughout the year and in anticipation of uncertain economic terrain ahead.

“Anecdotally, many firms are telling us that in the current climate, they're struggling just to stand still.

“If the Chancellor is serious about driving growth, levying more taxes on businesses is unequivocally the wrong move.

“Businesses need the Chancellor to deliver a budget that boosts trade, tackles skills issues and unlocks investment for infrastructure.”