The head of the Confederation of British Industry (CBI) has implied that the chancellor ought to disregard Labour's manifesto commitment not to hike taxes on working individuals, as businesses steel themselves for the Autumn Budget.
Rachel Reeves is anticipated to unveil a new round of tax increases in her 26 November Budget, aiming to counter worsening economic projections, as reported by .
Yet, the Chancellor finds herself constrained by Labour's vow to avoid raising income tax, national insurance, and VAT, which are the principal sources of Treasury income.
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In an unexpected turn, CBI's chief executive, Rain Newton-Smith, has declared "the time for tinkering is over" regarding methods to generate extra funds.
Penning an article for the Guardian, Newton-Smith cautioned the chancellor against rigidly sticking to tax pledges made before the 2024 general election, given the government's mounting economic challenges.
She stated: "The fact is is that geopolitical and global markets have shifted.
"The world is different from when Labour drafted its manifesto, and when the facts change so should the solutions. The chancellor cannot raid corporate coffers again, so she must look elsewhere."
Reform business rates
Newton-Smith further advocated for the overhaul of business rates, adjustments to VAT thresholds for small enterprises, and reform of stamp duty.
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Reeves announced a £40 billion raft of tax increases in her inaugural budget last year, which included a controversial £25 billion hike in national insurance contributions.
This move has been widely criticised for contributing to inflation, and the chancellor has since pledged not to impose further tax rises.
Nonetheless, the independent Office for Budget Responsibility (OBR) is expected to revise its growth forecasts downwards after reassessing its optimistic productivity projections.
This adjustment could force the Treasury to find an additional £20 billion in revenue within five years to ensure Reeves can adhere to her fiscal rules.
Manifesto constraints
In recent weeks, Reeves has reiterated her commitment to honouring the pledges made, amidst mounting speculation about potential tax increases.
Ruth Curtice, chief executive of the Resolution Foundation, concurred that finding £20 billion within the manifesto's limitations would be challenging.
Speaking to the Guardian, she stated: "Raising that amount without touching taxes that account for three-quarters of the 海角视频's tax base risks...loading excessive pain on to small groups and harming economic growth."
A Treasury spokesperson asserted: "We are protecting payslips for working people by keeping our promise to not raise the basic, higher or additional rates of income tax, employee national insurance, or VAT."