Chancellor warned against ‘Groundhog Day’ Budget

Business urges Reeves to avoid 'death by a thousand taxes'

- DAVID MADDOX POLITICAL EDITOR

Rachel Reeves has been given a stark warning from business to avoid “death by a thousand taxes” in her long-awaited Budget this week.

The CBI’s director general, Rain Newton-Smith, will tell the chancellor today that the UK risks being stuck in a “Groundhog Day”, where politics trumps growth and no bold decisions are taken.

In a speech to hundreds of business leaders at the QEII Centre in London, the government will be urged to “change course ... and work with business to fix what’s broken”.

“We face a fork in the road,” Ms Newton-Smith is expected to say. “Where our biggest fear is, if we get the wrong choices on Wednesday... more short-term tinkering; more bold choices not made; more politics over growth ... then we risk getting locked in a stop-start economy.

“Where large tax rises rear their head every year or even every autumn and spring. That is not the road to growth. That is a cycle of doubt and uncertainty. That is the road to decline.”

The attack is a swipe at the U-turn over raising income tax, which was cancelled at the last minute, with Ms Reeves now expected to go for a collection of smaller taxes on capital gains, property, gambling, the banking sector and other areas.

The comments come as ministers, MPs and other senior Labour figures told The Independent the Budget is aimed at “appeasing” angry backbenchers to avoid a leadership coup against Sir Keir Starmer. A poll of Labour members over the weekend suggested Sir Keir would lose a future leadership contest to any of four potential rivals.

In other key developments ahead of the crunch Budget:

• The government has confirmed pensioners will get an inflation-busting rise with the triple lock.

• The chancellor is also now understood to be ready to find £3.5bn a year to scrap the child benefit cap.