Speaking at the CBI’s annual conference today [25 November 2024], Rain Newton-Smith (pictured) suggested businesses across many sectors were “being hit by a tough trading environment that just got tougher” due to changes in National Insurance contributions (NICs) and inheritance tax.

A CBI poll of 266 businesses found that two-thirds are reconsidering their hiring plans, with one-half of employers looking to cut jobs, since the Budget announcement revealed a £25bn increase in NI contributions for businesses. The threshold for paying NI on workers’ earnings dropped to £5k from £9.1k.

At the same time, the government has said it is a priority to get 9m people of working age who are currently out of work into the labour force.

In her first Budget as chancellor last month, Rachel Reeves announced a near-£70bn increase in public spending, partly funded by increases in taxes on businesses.

While rises in the minimum wage and workers’ rights reforms have been praised by unions and workers’ groups, bosses have hit out, saying that their businesses are being weighed down by multiple changes at once.

In her speech to the CBI’s conference today, Newton-Smith said: “Tax rises like this must never again simply be done to business.”

Newton-Smith also said profits “aren’t just extra money for companies to stuff in a pillowcase, but the key to investment”.

“When you hit profits, you hit competitiveness, you hit investment. You hit  growth,” she said.

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