The chancellor has created a “black hole” in the confidence of businesses in government, the chair of the Confederation of British Industry (CBI) has suggested.
Speaking to BBC Radio 4’s Today programme, Rupert Soames insisted business leaders were less likely to employ in the current climate.
He said: “The chancellor told us at the time of the budget that there was an unexpected hole of about £22bn in the government finances, and business was going to have to fill it.
“In filling in one hole, it’s created another, and that hole is a hole in the confidence and trust that business has in the government.”


The chancellor has repeatedly accused the previous government of leaving a £22 billion shortfall in the public finances and announced measures to fill the fiscal “black hole” at the autumn budget in October last year. Following the budget, employers will have to pay national insurance at 15 per cent on salaries above £5,000 from April, instead of 13.8 per cent on salaries above £9,100 currently.
The Treasury said the NI rise for employers will raise £20 billion.
Soames said: “I think sometimes [the government has] not understood the extent of the impact, particularly on companies that employ lots of people.
“We think the national insurance increases are going to feed through into inflation, we’re going to have a lower growth rate, but also, because of things like the Employment Rights Bill coming along, you’re going to find people laying people off and less likely to employ.”
The comments come as Reeves battles to meet her fiscal rules after a surge in borrowing costs, fuelling speculation of more spending cuts or tax rises.
Market moves have seen Reeves’ £10 billion of fiscal “headroom”, allowed for in the autumn budget, squeezed significantly.
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Josh Self is Editor of Politics.co.uk, follow him on Bluesky here.
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