London: As Chancellor Rachel Reeves prepares to unveil the 2025 budget, the Confederation of British Industry (CBI) has stepped up pressure, urging her to make bold and difficult decisions rather than settle for incremental fixes. In a keynote address at the CBI annual conference, its Chief Executive Rain Newton-Smith warned that the UK economy has been “largely stuck in a rut” since the 2007–08 financial crisis and cautioned that short-term political convenience could derail long-term growth.
Newton-Smith called for “one or two broad tax increases” instead of a proliferation of smaller levies, which she described as “death by a thousand taxes” that could undermine business confidence. She argued that if growth is truly a priority for the government, it must be backed by courage, telling attendees: “If growth is your priority, prove it make hard choices for it.”
Beyond taxation, the CBI leader underscored the need for Reeves to consult more closely with business on energy costs and labour-rights reforms. She warned that reforms imposed without collaboration risk being superficial or counterproductive, saying “lasting reform takes partnership not a closed door.” Newton-Smith also raised concerns about proposed changes to pension schemes, suggesting they could increase the cost of hiring.
In response to mounting business concern, Business Minister Peter Kyle announced a consultation on a plan to reduce energy prices by up to 25% for around 7,000 manufacturers beginning in 2027. The high energy burdens for UK manufacturers remain a key issue: energy-intensive British firms reportedly paid about four times more for electricity last year than their U.S. counterparts, and more than double what companies in France or Germany paid.
The timing of these warnings is critical. Reeves is expected to raise taxes by tens of billions of pounds yet again, without touching income tax sticking to a promise made during the 2024 election campaign. The Chancellor’s challenge will be to balance her fiscal targets and ambitions for welfare spending while satisfying the business community’s demand for stability, partnership, and long-term reform.