CBI Urges UK Chancellor Reeves to Break Labour Tax Pledge Ahead of Budget

Rain Newton-Smith, CEO of the Confederation of British Industry (CBI), has urged British Chancellor Rachel Reeves to reconsider Labour's manifesto pledge not to raise taxes on working people ahead of the Autumn Budget scheduled for November 26. Newton-Smith emphasized that changing geopolitical and economic conditions require a departure from the pre-election tax promises, warning against a "slavish adherence" to these commitments and advocating for strategic tax reforms instead. She highlighted the need to avoid further corporate tax hikes, which Reeves implemented last year by increasing employer National Insurance contributions, a move blamed for dampening investment and hiring. The CBI chief suggested reforms in areas such as business rates, VAT thresholds for small businesses, stamp duty, childcare subsidies, and taxes impacting labor mobility. Economists anticipate that Reeves will need to find substantial new revenue to address higher borrowing costs and a weaker growth outlook, making the budget a critical moment for fiscal policy adjustments. Labour remains committed to not raising income tax, National Insurance, or VAT on working people, but faces pressure to adapt fiscal plans in light of economic realities.