Britain ‘less attractive than Oman' after Reeves's tax raid on businesses
Britain has become a less attractive place to do business as Rachel Reeves's tax raid and sky-high energy prices hammer companies.
The UK has slipped to 29th place in the latest World Competitiveness Rankings, meaning the country is less attractive than countries including Oman, the Czech Republic and Saudi Arabia.
Britain is only marginally more appealing than high-tax France, Kazakhstan and Kuwait.
The findings came amid warnings from EY that high energy costs and slow growth are a threat to investment in Britain, and a survey from S&W showing companies are planning more lay-offs due to higher National Insurance contributions.
Jose Caballero, economist at the IMD World Competitiveness Centre, which publishes the index, said rising taxes were adding to Britain's economic problems.
He said: 'The problem is tax policies – higher taxes and public finances. For business efficiency, productivity is an issue, wages are an issue and also the efficiency of the labour force.
'If businesses observe higher labour costs and there is no corresponding increase in output, productivity will lessen.'
The Chancellor increased the taxes paid by bosses on their workers' pay packets from 13.8pc to 15pc in April, and lowered the threshold at which those National Insurance contributions kick in.
The £25bn raid has hit industries that employ a large share of part-time workers particularly hard.
Meanwhile, a survey of business leaders from S&W found most are cutting jobs because of Ms Reeves's tax rises. Just over half either have cut headcount or plan to, while 59pc are cutting staff hours and 51pc have frozen pay.
Fears of a fresh tax raid this autumn are already mounting, with the Chancellor understood to be drawing up plans to increase the levy paid on dividends.
It comes after Ms Reeves agreed spending plans with government departments for the next three to four years, limiting her room to cut expenditure if the public finances deteriorate further.
Paul Johnson, head of the Institute for Fiscal Studies (IFS), last week raised doubts over the viability of the plans set out in the spending review, accusing the Treasury of 'making up numbers'.
Energy costs
Britain ranked 67th out of 69 nations for commercial property costs in the IMD World Competitiveness's ranking and high fuel prices put the UK in 54th place for petrol, a dire sign for any company that needs to move goods around the country.
The findings came as EY separately said Britain attracted 853 foreign direct investment projects last year, marking a 13pc fall compared with 2023's levels. Peter Arnold, EY UK's chief economist, specifically called out energy costs as a problem.
He said: 'Energy prices have added to the cost of doing business in the UK, which has some of the highest energy prices in the developed world.
'Reforming planning rules and accelerating grid connectivity should start to alleviate investor concerns in the industrial and manufacturing sectors, as well as in tech and AI-fuelled industries, where high-growth assets, such as data centres, will require large amounts of energy.'
Business bosses hope the Government's industrial strategy and infrastructure plan, which is expected to be published in the coming weeks, will include steps to lower the cost of energy.
Industries from manufacturing to artificial intelligence are heavy users of energy, and so find the cost of bills particularly painful.
A government spokesman said: 'We are a pro-business Government. We delivered a once-in-a-parliament budget last year that took necessary decisions on tax to stabilise the public finances, including the NHS which has now seen waiting lists fall five months in a row.
'We are now focused on creating opportunities for businesses to compete and access the finance they need to scale, export and break into new markets.'
Switzerland, Singapore and Hong Kong topped the competitiveness table, with the US ranked 13th. The UK fell from 28th spot last year. Venezuela was bottom among all nations surveyed.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
BreakingNews.ie
8 minutes ago
- BreakingNews.ie
Concern Stormont MLAs delivering pre-scripted remarks for social media clips
Concern has been expressed that Stormont MLAs are delivering pre-scripted text in the Assembly for a clip on social media. Stormont Speaker Edwin Poots said he was also concerned that Points of Order are being raised about 'the normal cut and thrust of debate'. Advertisement Almost a year and a half since the Northern Ireland Assembly was restored, Mr Poots has written to MLAs about the standards of debate in the chamber. Stormont Speaker Edwin Poots (Liam McBurney/PA) He also made his points at the start of the plenary session on Tuesday. Mr Poots, who has been elected to the Assembly for almost three decades, said he has witnessed 'political giants who passionately articulated their own case', but also engaged in debate and 'realised that they had to give as good as they could take'. 'Our standards of debate are often referred to in the context of the first element – the standard of remarks made about other members. However, there has been a decreased focus on the second element – the concept of debate,' he said. Advertisement 'If the Assembly is to be serious about its scrutiny role, having a strong culture of parliamentary debate is vital.' Mr Poots said requiring MLAs to take care in their language and have civility in exchanges 'is not intended to, and should not, prevent passionate and robust debate'. 'In my time in the Assembly since 1998, I have been privileged to witness political giants, who passionately articulated their own case, engaging in debate,' he said. 'However, they also realised that they had to give as good as they could take. Advertisement 'The freedom to challenge and to express different views in debate are core to this Assembly's core functions of exercising scrutiny, holding ministers to account and representing our constituents. 'Proper debate is about both having the opportunity to state your own views and listening, responding to and challenging the views of others. 'Some members increasingly concentrate only on stating their own opinions. 'Technology has created a temptation for members to deliver a pre-scripted text in the Chamber, shortly after which they leave to issue a clip of their speech on social media. Advertisement 'If debate was only about a series of members reading out pre-scripted thoughts on an issue, without interaction, there would be no need for an Assembly Chamber – we could do it by email.' He added: 'I am also concerned about the tendency to raise Points of Order with the chair about the normal cut and thrust of debate, rather than challenge those points themselves.' He went on to say he is expanding the Ten Practical Principles of Debate circulated in 2021 to 'ensure they focus not only on interactions between members, but also on having a strong culture of debate and challenge'. 'When the Assembly has responsibility for making legislation which impacts on people's lives, it is vital that members are able to probe all the arguments before the Assembly takes a decision,' he said. Advertisement 'It is my role to encourage the conditions for members to be able to exercise effective scrutiny and accountability in the Chamber. 'I therefore ask all members to take the time to reflect on the principles I have set out in the attachment and to adhere to them in debate.'
North Wales Live
8 minutes ago
- North Wales Live
HMRC rule change: Thousands of UK households urged to gift money to children in advance
UK households earning £100,000 are forecast to "bear the brunt of tax rises" in the Autumn Budget. It is feared that Chancellor Rachel Reeves will initiate HMRC tax raids on UK households in her Autumn Statement. Sarah Coles, head of personal finance at Hargreaves Lansdown, has warned that "so-called Henrys (High Earners Not Rich Yet) could bear the brunt of tax rises". Ms Coles also cautioned that they "already face significant income tax burdens, and those earning more than £100,000 fall off the cliff edge of government support for childcare too." If the Government extends the income tax freeze beyond 2028, "it would mean more people pass over the threshold to pay 60 per cent, and more pass into the realms of 45 per cent tax too," Ms Coles stated. Warnings have also been issued about increases in council tax and a tax on inheritance and pensions under new HMRC rules and shake-up previously confirmed by the Labour government, reports Birmingham Live. A way to navigate the rule shake-up has also emerged, though. IHT changes might prompt those planning to leave money to Henrys to "do so sooner rather than later, to take advantage of gifting allowances or get the clock ticking on the seven years it takes for a larger gift to leave their estate," Ms Coles said. The term 'Henrys' was coined way back in a 2003 article in Fortune, an American magazine. Emma Sterland, chief financial planning director of wealth managers Evelyn Partners, spoke out last year to highlight the other clouds on the Henrys' horizon. "The pension tax reliefs may be under threat in the Budget, with higher-rate relief abolished and replaced by a lower flat rate," says Sterland. Join the North Wales Live WhatsApp community group where you can get the latest stories delivered straight to your phone She continued: "Thousands of people are coming off heavily discounted fixed-rate mortgages at rates of 2 per cent or lower. Mortgage rates may be moving downwards but these borrowers will still be paying substantially more each month." Giving them some good news, Andrew Montlake of mortgage brokers Coreco said: "There are specialist lenders who are prepared to advance 5.5 times income for "high net worth" customers who are earning above, say, £100,000. Some lenders will do special deals for accountants, doctors and lawyers." He continued: "If you're on £300,000 a year or more, a private bank, like Investec, will start with a blank sheet of paper when it assesses how much it may be happy to lend you. But it may require that future bonuses be used to pay down the loan."
Sky News
11 minutes ago
- Sky News
23andMe fined millions by UK watchdog over 'profoundly damaging' cyber attack
The genetic testing company 23andMe is being fined £2.31m by the UK's privacy watchdog over their 2023 data breach that saw the personal information of seven million people stolen. More than 150,000 Britons had their personal information taken by hackers. Family trees, health reports, race and ethnicity information may all have been stolen, along with addresses, dates of birth and profile pictures. A database shared on dark web forums and viewed by Sky News' US partner network, NBC News, contained a list of 999,999 people who allegedly had Ashkenazi Jewish heritage, according to 23andMe's genetic profiling. "Crazy. This could be used by Nazis," said one person at the time who appeared in the database. The ICO's fine comes after a joint investigation with Canada's privacy watchdog. It is the most severe punishment the watchdog can impose and reflects repeated failures to protect extremely sensitive data, according to the information commissioner. "This was a profoundly damaging breach that exposed sensitive personal information, family histories, and even health conditions of thousands of people in the UK," said John Edwards, the UK's Information Commissioner. "23andMe failed to take basic steps to protect this information. "Their security systems were inadequate, the warning signs were there, and the company was slow to respond. This left people's most sensitive data vulnerable to exploitation and harm." Despite the attack starting in April 2023, 23andMe did not open an investigation until October that year, when an employee discovered the stolen data had been advertised for sale on Reddit. The company's defences only became strong enough to halt the attack by the end of that year - but that was not the end of 23andMe's troubles. 'Sue you to oblivion' By March this year, the best-known genetic testing company in the world had filed for bankruptcy, unable to rebuild trust after the hack and make enough money from its business model. It will now be sold for $305m (£225m) to 23andMe's original co-founder, Anne Wojcicki and her non-profit TTAM. But a blistering exchange in the US Senate last week laid out fresh concerns for the sensitive data users have shared with 23andMe. Senator Josh Hawley accused Joseph Selsavage, the interim chief executive of 23andMe, of lying to his customers when he says they can delete their genetic data from the company's databases. "You're not deleting it," he said, "because if you were, your company wouldn't be worth $300m." "I hope [users] will rush to the courthouse [...] to sue you into oblivion." Mr Selsavage denied Senator Hawley's claims, saying his company deletes all user data when requested. James Moss, the director of cyber investigations at law firm Addleshaw Goddard, told Sky News the ICO's fine was "about as serious as it gets" but an enforcement order, a notice from the watchdog that dictates how data can be used in the future, would be "more important". "That's the notice which looks forward and says, 'look, you have a legal obligation under UK law to continue to protect the personal data of these 150,000 UK citizens'. And that's arguably the more important," he said. A total of 28 US attorneys general last week launched a legal case against 23andMe to protect user data during the sale, and urged customers to purge their information from the firm's database, given the sensitivity of the data it has collected over the years. 23andMe already sells its users' genetic data and has made at least 30 deals with biotech and pharmaceutical companies like GSK. A spokesperson for the 23andMe buyer, TTAM, told Sky News the non-profit had made "several binding commitments to enhance protections for customer data and privacy". These include allowing individuals to delete their account and opt out of research at any time, notifying customers at least two days before the deal closes about what TTAM's acquisition means for them and agreeing, if TTAM were to sell the company again, only to sell it to someone who agrees to adopt TTAM's privacy polices and comply with data laws. Customers will also be offered two years of free Experian identity theft monitoring, while TTAM will continue to allow "de-identified data" to be used for scientific and biomedical research at universities and nonprofits. No money for UK victims The £2.31m fine money will go to the state rather than to individuals affected by the hack. In the US, victims of the hack won $30m in a class action lawsuit last year, but that's not an option in the UK, despite the incredibly sensitive information that was shared. Class action lawsuits for data breaches could "improve and increase accountability for data-protection breaches", according to solicitor Alex Lawrence Archer from the data law agency AWO. "But also help individuals who are affected get something back, help them get redress, because a fine paid to the ICO doesn't achieve that. Although [the fine] is welcome, it doesn't help individuals." For anyone thinking about using one of the many genetic testing companies that have sprung up since 23andMe was founded in 2006, Mr Lawrence Archer has cautionary advice. "Handing over your genetic data is a really big step, and it's something that [...] people have hitherto been encouraged to take quite lightly," he said. "There's no hard and fast rule like you should or you shouldn't do it, but it's something that you should think really carefully about. "It can be a quite permanent step that's very difficult to undo. It's not something that should be done lightly."
