Cut taxes to give the economy a boost, urge business leaders

JEREMY HUNT’S tax raid poses one of the biggest threats to UK businesses this year, according to a survey of British bosses that urged the Chancellor to make restoring competitiveness a “priority” for the Budget.

Energy support was also one of the most important issues for businesses, according to Boston Consulting’s survey of 1,500 British business leaders.

A quarter of company bosses surveyed also said higher taxes posed one of the biggest threats to doing business, while 40pc said they were still struggling with energy costs.

Companies and workers face paying higher duties from April, as corporation tax rises from 19pc to 25pc, investment incentives are removed and employees are forced to hand more of their pay to the taxman as tax-free thresholds are frozen until 2028.

Inflation also remains stubbornly high, at above 10pc, although most economists expect the rate of price growth to fall sharply this year.

Raoul Ruparel, director of Boston Consulting’s Centre for Growth and a former government adviser, said businesses were looking for some relief from the Chancellor to boost confidence. “A lot of businesses I speak to feel they are being squeezed from all sides,” he said. “And I think that is part of what comes through in the findings, which links back to the tax environment and what the Government can do to ease that pressure on their margins.”

It came as new research from EY found that the cost of living pressures will intensify the UK’S regional divide, stoking pressure on the Government’s levelling-up agenda.

While the consultancy predicts the UK as a whole will record a 0.6pc drop in growth this year, the hit to the capital’s economy will be much gentler at 0.2pc. Meanwhile, regions such as Yorkshire and the Humber and the East Midlands are expected to suffer the steepest drops at 1pc each.

London’s strong financial services sector and other knowledge-based fields provide a buffer against the worst of the blow, according to the research.

Rohan Malik, EY’S UK managing partner for markets and accounts, said: “Levelling up presents an opportunity to boost growth – but familiar patterns are still all too present as the economy recovers from the pandemic.”