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Budget tax rises will make it harder to hire, says CBI

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Ms Newton-Smith will also say that profits “aren’t just extra money for companies to stuff in a pillowcase, but the key to investment”.

“When you hit profits, you hit competitiveness, you hit investment. You hit growth,” she will say.

Last week, a group of major retailers, including Tesco, Amazon and Next, wrote to the chancellor, external to warn her of the impact tax changes would have.

Firms such as Sainsbury’s and Marks & Spencer have said they will face a huge jump in costs and they may need to increase prices for customers.

However, critics have said that asking multimillion pound companies to pay more in taxes was one of the fairer ways to improve funding for services like the NHS.

“No-one is questioning that we need to see the tax rises to really help fund our public services,” Ms Newton-Smith told the BBC’s Today programme.

But she said that firms had been taken aback by the lowering of the threshold for the payment of National Insurance, and that the pain was “really serious”.

In her speech she will urge the government to consider a number of reforms to improve economic growth, such as giving companies more flexibility around how they spend money using the apprenticeship levy.

She will also say that the chancellor should look at updating business rates for commercial property, as well as simplifying the planning system.

According to reports on Monday, the chancellor will use an opportunity at the conference to respond to criticism of Labour’s first Budget in 14 years.

The Guardian suggests, external she will tell business leaders that they have offered “no alternative” to her plans, and that it was necessary to “wipe the slate clean” following the General Election.

During the campaign period, Labour had promised that “working people” would not see higher taxes in their payslips.

A government spokesperson said that the pledge meant that it had had to take “difficult choices to repair the public finances and to put public finances on a firmer footing”.

“Despite the difficult inheritance, the government is determined to go for growth and to work in partnership with businesses to invest in Britain’s future so we can make every part of the country better off,” they added.

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