CBI: UK Employers Will Scale Back Investment and Employment in Response to Tax Hike

Forex - The Confederation of British Industry (CBI) stated in a press release ahead of its annual conference that British employers were caught off guard by last month’s £25 billion ($31 billion) tax increase in the budget, and in response, they plan to make cuts in training, investment, and employment.

The CBI reported that a survey among its members showed that 61% viewed the UK as a less attractive place to invest, with nearly half planning to either reduce staff levels or cut back on wage increases following the significant rise in employer social security contributions.

CBI Chief Executive Rain Newton-Smith commented, "The increase in National Insurance and the sharp drop in the threshold has caught us all unprepared. The potential cost of the expansion and increase of the National Living Wage... and the changes to the Employment Rights Bill... are placing a heavy burden on businesses."

The CBI’s concerns come in an environment with broader signs of economic slowdown in the UK before and after the budget.

Chancellor Rachel Reeves, in the first budget prepared by the Labour Party in 14 years, raised taxes by a total of £40 billion to fund higher spending on public services and to fill the £22 billion gap left by the previous government.

Newton-Smith stated, "This kind of tax increase should never happen to businesses again."