<\/p>\n
Rain Newton-Smith speaking in Glasgow two years ago (pic: DB Media Services)<\/p>\n
John Healey\u2019s October Budget must draw a red line under more rises in the cost of hiring,\u00a0investing and doing business, the head of the CBI will say at an event in Glasgow tonight.<\/p>\n
Speaking to business and political leaders in Glasgow, CBI chief executive Rain\u00a0Newton-Smith will also warn Scotland\u2019s First Minister John Swinney that his proposed food price cap \u201cwon\u2019t work\u201d and demand that prices are left to the market.<\/p>\n
In a wide-ranging address at the CBI Scotland annual dinner, Ms Newton-Smith will call for a bold and ambitious reset of the UK\u2019s relationship with the EU as well as a quick decision on the Jackdaw gas field.<\/p>\n
She will remind Andy Burnham\u2019s new government that the cost-of-living crisis \u201cis also a cost-of-doing-business crisis\u201d and that \u201cthe two\u00a0are inseparable.\u201d<\/p>\n
She declares: \u201cThere is no lasting answer to the cost of living that ignores the cost of\u00a0doing business.\u201d<\/p>\n
Ms Newton-Smith will highlight \u201ctwo costs that have risen to eye watering levels \u2013 energy and hiring\u201d, stating that more than nine out of 10 businesses have seen their energy costs rise and four out of 10 say they are cutting investment directly because of it. <\/p>\n
\u201cMeanwhile, the changes to National Insurance have pushed the business tax burden to the highest on record. Today, the profitability of UK business is the lowest since the 2008 financial crash.<\/p>\n
John Healey will be warned against raising costs for business<\/p>\n
\u201cFor a business in the UK today \u2013 when your margins are that low, and another cost\u00a0 lands, where does it go? In every sector, we\u2019ve heard the same: you have just two\u00a0 choices.<\/p>\n
\u201cEither pass it on to consumers through higher prices \u2013 if demand is strong\u00a0enough \u2013 or absorb it yourself, reducing your room for hiring. For investment. <\/p>\n
\u201cFor wage\u00a0rises. For growth. In a word, costs don\u2019t disappear \u2013 they travel.\u201d<\/p>\n
On the forthcoming Budget on 28 October, she acknowledges that the Prime Minister and Chancellor face hard choices. The former had shown goodwill towards business and the Chancellor has said\u00a0he wants to drive profit in British business, she says.<\/p>\n
\u201cBut what\u2019s in the Budget will be the real test. The October Budget must draw a red line under more rises in the cost of hiring,\u00a0investing and doing business.<\/p>\n
\u201cThe rise in employer National Insurance has proven a step too far. For many, costs are\u00a0 now too high to hire. To create more jobs for young people, to ease the pressure \u2013 we\u00a0need a targeted reduction.\u201d<\/p>\n
On the plan for a cap on a basket of basic food items, Ms Newton-Smith will say: \u201cThe proposal of a food price cap here in Scotland won\u2019t work. While a cap can hold\u00a0 down a price, it cannot bring down the cost behind it \u2013 the cost of farming, production,\u00a0refrigeration, labour, energy.<\/p>\n
John Swinney\u2019s food price cap was a manifesto commitment (pic: DB Media Services)<\/p>\n
\u201cIt can change the number printed on the shelf. But it does\u00a0 not bring down the costs running through the supply chain.<\/p>\n
\u201cDivert the policy energy and resources that will be wasted there \u2013 into something\u00a0 positive. Work with business to ease the pressure where you can and let competition do its job.\u201d<\/p>\n
On EU relations, she adds: \u201cBrexit was bad for business. Bad for our economy, reducing our GDP by as much as 8%. Business leaders I speak to do not want to re-litigate the politics of it. Nor do they want to rejoin at any cost or on any terms. But they do want\u00a0both sides to get on and reduce the barriers, because the status quo won\u2019t cut it for\u00a0growth.<\/p>\n
\u201cNor will retreating into isolationist bunkers. The friction now is hitting Scottish\u00a0 business, hitting British business. The reset must be bold and ambitious. Our\u00a0 governments must be ready to spend political capital, to make political sacrifices \u2013 in\u00a0the national economic interest.\u201d<\/p>\n
With a decision on the Jackdaw gas field expected next Tuesday, she says.\u00a0\u201cGiven the go-ahead in 2022, it\u2019s been stalled for too long. And the workforce \u2013 which we need for the transition too \u2013 left in limbo. Decisions delayed mean investment down the\u00a0drain. We need a decision now.\u201d<\/p>\n
Following the speech, Ms Newton-Smith will be joined in conversation by the Scottish Secretary Douglas Alexander.<\/p>\n
\t #Budget #add #business #costs #CBI #chief #Daily #Business<\/p>\n","protected":false},"excerpt":{"rendered":"
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