CBI warns of Budget profit squeeze

In her first major speech since the Autumn Budget, Newton-Smith will today (25 November) commend the government for “drawing the curtain on a near decade of instability”, but will call for action on a range of issues, including business rates reform.

Launching the CBI’s new Blueprint for Competitiveness, a policy framework for enhancing the UK’s competitiveness against a shifting global landscape, Newton-Smith will highlight the importance of "public-private partnerships built for success", as holding the key for "transforming economic challenges into opportunities for sustained growth".

In her speech she will call on the government to address the many challenges facing businesses; including a faster more transformative timetable for business rates reform, flexibility on the apprenticeship levy and boosting occupational health incentives to support the health of the workforce.

During the CBI’s Annual Conference in London today, Rain Newton-Smith will say: “Right now, we – this country, this government, this room of brilliant business leaders, we are standing on a shoreline. And in the distance, there’s an island: a vision of growth. The real, long-term sustainable growth that we so badly need.

“But what we must all understand…is that there is only one force that can bridge that gap. Only one force that can make that vision a reality. That’s the people in this room. It’s the ingenuity, the ideas and the investment of business.”

The CBI is pressing the government to “be bold, be brave, give hope and have confidence”.

“[We] saw the chancellor deliver on that in part – with stability in our public finances, with the brave decision to create space in our fiscal rules for capital spending. And the corporate tax roadmap we called for, to give business certainty for the long-term.”

Last week, almost 80 retail bosses signed a letter by the British Retail Consortium (BRC) to the chancellor warning of the “consequences of the Autumn Budget”, they include AllSaints CEO Peter Wood, H&M CEO and country manager Henrik Nordvall, JD Sports Group CEO Regis Schultz and M&S CEO Stuart Machin.

During the Budget, on 30 October, Rachel Reeves increased National Insurance contributions by employers from 13.8% to 15%. She acknowledged it was a "difficult choice" and one she did not take lightly.

The letter stated: “We are writing to share our significant concerns about the impact of the Budget on the retail industry and the economic consequences for inflation, employment and investment.”

They say the changes could mean a rise of up to £7bn a year for the retail sector.