Healey told to cut employment taxes and energy bills to boost business

The Confederation of British Industry (CBI) has urged Chancellor John Healey to reduce employment taxes and energy costs in his upcoming Budget on 28 October. The lobby group, in its submission, urged the Chancellor to provide businesses with "breathing space" due to rising costs and uncertainty surrounding the government's tax plans.

The CBI recommended increasing the threshold at which employers begin paying National Insurance from £5,000 to £6,000 to encourage hiring of younger workers, and called for removal of policy costs from business electricity bills, reform of business rates, and simplification of the tax system. CBI chief executive Rain Newton-Smith warned that additional tax burdens would undermine government growth ambitions, stating, "Business does not need another reason to wait – it needs a reason to invest."

This call comes after business leaders from firms like Tesco, Marks & Spencer, and Sainsbury's met with Healey to request relief from rising employment costs. The pressure to act is mounting ahead of the Budget, as businesses continue to grapple with increased expenses. However, a recent survey by Helm, a community group of start-ups, found that only 4% of founders believe the Budget will be positive for businesses, with 88% fearing a change in taxes on capital or assets.

Andreas Adamides, CEO of Helm, noted that rumors of capital gains tax increases or other levies on wealth could prevent founders from planning confidently. While it is reported that Healey may reject plans to equalize capital gains and income tax rates, a Labour-linked think tank has added support for such reforms, suggesting capital gains tax reform with generous loss relief and exemptions for high-growth start-ups could generate around £16 billion for the Treasury.