Recent tax increases introduced in the Budget are making it harder for businesses to hire and invest, according to the Confederation of British Industry (CBI). Speaking at the CBI’s annual conference, its director general, Rain Newton-Smith, said changes to National Insurance contributions (NICs) and inheritance tax were placing extra strain on businesses already facing a challenging economic climate. She warned that such measures could harm growth and competitiveness by reducing profits, which are critical for investment.

Chancellor Rachel Reeves’s Budget, which included nearly £70bn in additional public spending, has drawn mixed reactions. While higher wages and improved workers’ rights have been welcomed by unions, business leaders have expressed concerns over rising costs. A recent CBI survey revealed that nearly two-thirds of companies believe the Budget will negatively impact investment in the UK. Retailers like Tesco and Sainsbury’s have also warned that tax changes could lead to higher prices for consumers and hinder expansion plans.

Newton-Smith called for reforms to foster economic growth, including more flexibility in using the apprenticeship levy, updates to business rates for commercial properties, and a streamlined planning system. She argued that businesses must be seen as partners in driving growth, not as targets for sudden tax increases.

In response, the government defended the tax rises, citing the need to stabilise public finances after the General Election. A spokesperson emphasised that while tough choices were necessary, the government is committed to fostering growth and working collaboratively with businesses to build a stronger economy.