CBI boss calls for Rachel Reeves to tear up Labour's manifesto pledge on tax

"Rachel Reeves is widely expected to present a package of tax rises in her 26 November statement to offset deteriorating economic forecasts. However, the chancellor has been hamstrung by Labour's promise not to increase the three main revenue-raisers for the Treasury: income tax, national insurance and VAT. But in a surprise move in the debate about how to raise extra revenue, the CBI's chief executive, Rain Newton-Smith, says the time for tinkering is over."

"She said the pre-election promises have now been overtaken by events. The fact is that geopolitics and global markets have shifted. The world is different from when Labour drafted its manifesto, and when the facts change so should the solutions, she writes. The chancellor cannot raid corporate coffers again so she must look elsewhere, embracing long-term strategic tax reforms rather than maintaining a slavish adherence to manifesto promises on tax or ideas based on the world as it was 18 months ago."

"The party's manifesto states: Labour will not increase taxes on working people, which is why we will not increase national insurance, the basic, higher, or additional rates of income tax, or VAT. As well as suggesting Reeves revisit Labour's promises on personal taxation, Newton-Smith calls for the reform of business rates, VAT thresholds for small firms and stamp duty. Reeves used her maiden budget last October to announce a 40bn package of tax increases,"

The Confederation of British Industry urged the chancellor to reconsider the pledge not to raise taxes on working people, arguing that geopolitical shifts and changed global markets require revised solutions. The chancellor faces pressure to present tax rises on 26 November to offset deteriorating forecasts but is constrained by the promise not to increase income tax, national insurance or VAT. The recommendation calls for reforms to business rates, VAT thresholds for small firms and stamp duty, and for long-term strategic tax changes rather than repeat employer national insurance hikes or adherence to pre-election pledges.

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