You must do more to help business NOW: CBI boss delivers stark warning to Hunt
The CBI boss has urged Jeremy Hunt to freeze business rates and overhaul tourist tax to kick-start the economy.
Rain Newton-Smith also argued that the overall corporate tax rate would have to fall in the long term to give Britain a boost.
Meanwhile, she insisted the lobby group has recovered after being plunged into crisis over sexual abuse claims.
“We’re back,” Newton-Smith said at the Confederation of British Industry’s annual conference in central London.
Her comments on taxes ahead of the chancellor’s autumn statement tomorrow add to growing calls for Hunt to use some of the spending power he is likely to have to ease pressure on businesses and households.
CBI boss Rain Newton-Smith (pictured) argued that the overall corporate tax rate would have to fall in the long term to give Britain a boost.
Retailer Frasers Group and shopping center chain Westfield also called for action on business rates and jeweler Boodles described the tourist tax as a ‘spectacular own target’.
One measure in the autumn statement that is considered very likely is an extension of ‘full expensing’ – a tax break that rewards companies for investments in machinery and installations.
The policy, announced in the spring, helped push the headline corporate tax rate up from 19 percent to 25 percent earlier this year, set to expire in 2026.
Speaking to the Mail at the CBI conference, Newton-Smith added her voice to the chorus of business leaders who want the conference to be made permanent.
“It is important that we look at the wider tax landscape and ensure that Britain is competitive when it comes to corporate tax as a whole,” she said.
Newton-Smith acknowledged that the headline corporate tax rate – which was increased in the spring despite protests from businesses – was unlikely to go down, only strengthening the case for an extension of full spending.
But she continued: ‘Of course looking at the nominal rate over the longer term is something that we would want every government to look at to ensure that we remain competitive.’
She also said business rates – which are expected to rise in the spring using September inflation as a benchmark – should also be frozen.
“If business rates were to rise again by 6.7 per cent this would be a real challenge for many high street shops, leisure centers and much further afield,” she said.
Chris Wootton, Chief Financial Officer at Frasers Group, said: “We are extremely concerned about the prospect of a substantial increase in business rates.
‘We urge the Government to reconsider the planned increase to ensure businesses like ours can continue to invest in the future of the High Street, creating jobs, opening shops and driving Britain’s economic growth can support.’
The CBI is also urging the Chancellor to review the decision to abolish the VAT exemption on expenditure by foreign visitors, which is described as a tourist tax.
Newton-Smith added: ‘It’s about ensuring that Britain remains a really attractive destination for international tourists and what they bring to the economy.
‘It’s one of our biggest exports when you think about what Britain can offer the world.’
Newton-Smith was speaking as the CBI held its first conference since it faced a crisis following a series of sexual abuse allegations.
The claims prompted major organizations such as Aviva, John Lewis and NatWest to cancel their memberships.
The lobby group’s conference this year lacked the top executives it might have expected at previous events.
But the Chancellor did pronounce a coup for the organizers during the event. And Newton-Smith – former chief economist at the CBI – said: ‘I think a few months ago it might have felt like this wouldn’t be where we are now, but we are absolutely delighted.
‘It really feels like we are influencing policymakers again on the major issues of our time.’