They must do more NOW to help business: CBI chief issues stark warning to Hunt

The CBI chief has called on Jeremy Hunt to freeze business rates and review tourist tax to stimulate the economy.

Rain Newton-Smith also argued that the corporate tax rate should be cut in the long term to boost the UK.

Meanwhile, she insisted the lobby group had recovered after being plunged into crisis over sexual assault allegations.

“We are back,” Newton-Smith said at the Confederation of British Industry annual conference in central London.

Her comments on taxes ahead of the Chancellor’s Autumn Statement tomorrow add to growing calls for Hunt to use some of the spending space likely to be available to him to ease pressure on businesses and households.

CBI boss Rain Newton-Smith (pictured) argued that the corporate tax rate should be cut in the long term to boost the UK

Retailer Frasers Group and shopping center chain Westfield also called for action on business rates and jeweler Boodles described the tourist tax as a “spectacular own goal”.

One measure seen as most likely in the fall report is the expansion of “full cost accounting” – a tax break that rewards companies for investing in plant and machinery.

The policy announced in the spring has helped ease the pain of the corporate tax rate, which rose from 19 percent to 25 percent earlier this year but is set to expire in 2026.

Speaking to the Mail at the CBI conference, Newton-Smith joined the chorus of business leaders who want it to remain permanent.

“It is important that we look at the wider tax landscape and ensure that the UK is competitive overall in terms of corporation tax,” she said.

Newton-Smith acknowledged that it was unlikely that the overall corporate tax rate, which was raised in the spring despite loud protests from businesses, would fall, reinforcing the argument for extending the full tax bill.

But she continued: “Obviously we would want any government to look at policy rates in the longer term and make sure we remain competitive.”

She also said that “ideally” corporate interest rates – which are expected to rise in the spring, using the September inflation rate as a benchmark – should also be frozen.

“A further 6.7 per cent increase in business rates would be a real challenge for many high street shops, leisure centers and much more,” she said.

Frasers Group chief financial officer Chris Wootton said: “We are extremely concerned about the prospect of a significant increase in business rates.”

“We urge the government to reconsider the planned increase to ensure businesses like ours can continue to invest in the future of the high street, create jobs, open shops and support the UK’s economic growth.”

The CBI is also calling on the Chancellor to review the decision to scrap the VAT relief on spending by foreign visitors, known as the tourist tax.

Newton-Smith added: “It’s really about ensuring the UK remains a really attractive destination for international tourists and what they bring to the economy.”

“It’s one of our great exports considering what Britain can bring to the world.”

Newton-Smith was speaking as the CBI held its first conference since being in crisis following a series of sexual assault allegations.

The allegations prompted well-known organizations such as Aviva, John Lewis and NatWest to cancel their memberships.

Missing from this year’s lobby group conference were the star bosses one would have expected at previous events.

But the Chancellor said the event was a coup for the organizers. And Newton-Smith – former chief economist at the CBI – said: “I think a few months ago there might have been a feeling that we weren’t there yet, but we’re absolutely delighted.”

“It really feels like we are once again influencing policymakers on the big issues of the day.”