LONDON – Confederation of British Industry (CBI) chair Rupert Soames has sharply criticized the UK government for treating employers as a “cash cow” in the wake of the recent budget and urged ministers to reconsider plans for stricter workers’ rights.
Speaking at the CBI’s annual conference on Monday, Soames said, “In the budget, business has been the cash cow and it’s been milked. Don’t go and whack it.” He highlighted concerns about the impact of a £25 billion increase in employer national insurance contributions (NICs), part of a £40 billion tax hike announced in the October budget to fund public services.
Businesses Warn of Job Cuts Amid Rising Costs
CBI chief executive Rain Newton-Smith presented findings from a recent survey of 266 firms, revealing that half of businesses are considering job cuts, while nearly two-thirds are rethinking hiring plans due to rising costs. Major retailers have also warned of potential layoffs in a letter to Chancellor Rachel Reeves.
Reeves defended the tax increases as necessary to restore fiscal credibility after years of Conservative governance. She told business leaders, “We’ve drawn the line under the fiction of past public finance projections. I’m not coming back with more borrowing or more taxes.” She also emphasized pro-growth reforms, including changes to planning and pensions, as part of Labour’s broader economic strategy.
Conservative Leader Criticizes Labour’s Economic Policies
Conservative leader Kemi Badenoch addressed the conference, attacking Labour’s budget as an “unprecedented raid on business.” However, she stopped short of pledging to reverse the employer NICs rise, arguing against a “ledger-like” view of economic policy.
Workers’ Rights and Business Confidence
Labour’s newly proposed employment bill, which includes stricter obligations on redundancy consultations and reduced probation periods for workplace rights, has drawn criticism from business leaders. Soames warned that the combination of the NICs rise and enhanced workers’ rights could hinder government goals to boost employment.
“There appears to be a dissonance,” he said, citing mixed messages from government departments about job creation, tax burdens, and regulatory risks for employers.
Rebuilding the CBI’s Reputation
The conference also marked an effort by the CBI to restore its credibility following a scandal involving sexual misconduct allegations earlier this year. Soames insisted the organization is “back in the ring,” citing 400 meetings with government officials since the general election and improved internal governance.