Burnham should go on a ‘cost of doing business’ tour
An alarming note from one of the City’s top economists warns that October’s Budget could see taxes rise by almost the same amount as they did last year when Rachel Reeves cooked up £26bn worth of fresh hikes. Ruth Gregory, Deputy Chief UK Economist at Capital Economics, suggests that higher taxes “perhaps worth up to [...]
An economist warns that October's Budget could see taxes rise by nearly the same amount as last year's £26bn hikes, potentially costing businesses heavily. Deputy Chief UK Economist Ruth Gregory suggests that higher taxes, possibly amounting to 0.8% of GDP, might be necessary to fund Prime Minister Burnham's policy ambitions. Burnham has promised to adhere to the tax promises made in Labour's manifesto, ruling out raising income tax, employee National Insurance, corporation tax, or VAT, which together make up 54% of all revenue.
This leaves other taxes, new taxes, or expanding the tax base as potential solutions. While some taxes may burden businesses, Gregory believes they are more likely to affect individuals and households through changes in pension, inheritance, capital gains, or wealth taxation. The British Chambers of Commerce reports that "policy-driven costs," or burdens originating from Whitehall, have surged by more than 70% in a decade, with a mid-sized firm now paying £1.98m annually in domestic policy-related costs, up from £1.16m in 2016.
This includes minimum wage hikes, employer National Insurance, levies on energy bills, pension costs, business rates, and regulatory compliance costs. The PM is currently on a 'cost of living tour' and hopes to discuss these issues with business owners during his upcoming 'cost of doing business' tour.
Written by urgent.news from City AM's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
