Leaders of some of Britain’s most influential companies were sent to Downing Street on Wednesday evening, as Sir Keir Starmer sought to strengthen ties with business ahead of what is widely expected to be a painful budget tax hike later this month.
CEOs from banking giant NatWest; FTSE 100 Sage software suite; Marks and Spencer; Home Builder Taylor Wimpey; Renewable energy company Octopus Energy was among those invited to No. 10 for an informal reception with the Prime Minister. This gathering was part of an attempt to calm the nerves of companies in Britain, as the Treasury prepares a budget designed to fill a £30 billion gap in public finances.
Chancellor Rachel Reeves will deliver her statement on 26 November, and the outlook is bleak. Companies are preparing for a new round of tax increases at a time when relations between the government and industry are already tense.
Reeves’ first budget, delivered in October last year, sparked anger after raising employer national insurance and the minimum wage, sending costs sharply higher for businesses. For many bosses, the announcement torpedoed much of the goodwill that Labor had rebuilt with industry after its bruising relationship with business under Jeremy Corbyn.
Labor has worked hard ahead of the general election to reposition itself as the party of practical economic stability and growth. Starmer and Reeves launched a succession of charm attacks with FTSE leaders, private equity firms and business people, promising policy stability in contrast to the turmoil of previous Conservative administrations. However, much of this capital was spent in Reeves’ opening financial statement.
Since then, the Chancellor has repeatedly warned that further “difficult choices” cannot be avoided if the government is to restore public finances. In a speech earlier this month, she warned that “each of us must do our part for the security of our country and the brightness of its future” — a line that was widely interpreted as a precursor to sweeping tax hikes.
Among the measures said to be under consideration is an income tax increase that would break Labour’s manifesto commitments; suppression of limited liability partnerships, favored by law and accounting firms; and restrictions on salary-sacrifice pension plans, which could push employers’ costs even higher.
Downing Street declined to comment on the guest list or the discussions that took place at the reception. However, for many in the City, the message is already clear: the government wants businesses on its side before asking them to shoulder another share of the financial burden.
The post Keir Starmer woos top bosses ahead of tax-heavy budget first appeared on Investorempires.com.
