Tax rises must be coupled with business plan – TBI

ANY major tax rises imposed by Ms Reeves must be “temporary” and coupled with reforms to help businesses “bruised” by the last Budget, Sir Tony Blair's think-tank has said.

- SOPHIE WINGATE

A report from the Tony Blair Institute (TBI) called on the Chancellor to bring businesses “back onside” by moving beyond “the caution of the government's first year in office” in her November 26 Budget.

Ms Reeves has fuelled expectations that she will announce higher taxes by refusing to commit to maintaining Labour's manifesto promises not to hike income tax, national insurance or VAT.

The TBI said this must be accompanied by bold growth-boosting pro-business reforms that “break Britain’s tax-and-spend doom loop” and allow the government to roll back the tax rises as the economy improves.

It rejected the UK Government's proposal of giving workers “day one” protection against unfair dismissal, recommending instead a six-month qualifying period.

In its paper, the TBI backed “decisive” action such as hiking a major revenue-raising levy instead of more incrementalism that “creates pain but rarely momentum”.