Businesses sound alarm over ‘tax on jobs’ NICs raid in Budget as Keir Starmer kicks off glitzy UK global investment summit vowing to curb ‘red tape’ after Cabinet spat about P&O Ferries deal

Keir Starmer is kicking off a glitzy UK investment summit vowing to cut ‘red tape’ today – as businesses sound the alarm on Budget tax hikes.

The PM is gathering hundreds of senior figures at the Guildhall in London hoping to drum up tens of billions of pounds for the economy.

He will insist the government is pro-business, committing to ‘rip out bureaucracy’ and do ‘everything in my power to galvanise growth’. 

However, there is mounting concern about Rachel Reeves’ fiscal package due on October 30, with claims the Chancellor needs to raise around £25billion to avoid austerity.

Cabinet minister Jonathan Reynolds insisted yesterday that Labour’s manifesto pledge not to increase national insurance only applies to workers, not contributions by companies.

But businesses warned that hiking their element of the levy would be a ‘tax on jobs’. There are also fears that imposing NICs on employers’ pension contributions – which could raise up to £17billion a year for the Treasury – would hammer retirement funds and hamper investment. 

The summit was nearly overshadowed by a row over Louise Haigh’s (pictured) criticism of P&O Ferries that jeopardised a £1billion investment by its Dubai-based owner DP World

Sir Keir will host leading investors and CEOs at the inaugural International Investment Summit, where ministers hope to unveil deals worth billions for AI, life sciences and infrastructure. 

The summit was nearly overshadowed by a row over criticism of P&O Ferries that jeopardised a £1billion investment by its Dubai-based owner DP World. 

The spat was only smoothed over at the weekend after Sir Keir slapped down his own Transport Secretary Louise Haigh for urging a boycott of the operator. 

In a round of interviews this morning, Science Secretary Peter Kyle said he stands ‘absolutely ready to engage’ with Elon Musk amid suggestions the tycoon had been snubbed from an invite.

Mr Kyle suggested Mr Musk, who clashed with Sir Keir over the summer riots, was not invited to the international investment summit because ‘he doesn’t tend to do these sort of events’.

Pressed whether the Government should have invited Mr Musk, Mr Kyle told Times Radio: ‘Let me just send my very best to him on the safe landing of the booster rocket yesterday, it was a stunning achievement and I did watch slack-jawed at the staggering achievement that that represented.

‘Elon Musk has never come to any of the past investment summits that have been held under the previous government, he doesn’t tend to do these sort of events, but I stand absolutely ready to engage with him, to talk about any potential global investments he’s making – I’m not aware of any at this moment in time.’

He added that ‘we have good engagement with some of his companies’.

Ministers believe international investment will help with its goals to create jobs, improve living standards and make communities and families across the country better off. 

The Government will ask the Competition and Markets Authority to prioritise growth, investment and innovation and will review the focus of other major regulators to ‘curb red tape’ and put the UK ‘at the front of the queue’ for opportunities. 

Sir Keir will pitch Britain as a stable bet for investors, using his speech at the summit to vow to ‘do everything in my power to galvanise growth’. 

He is expected to say: ‘We’ve got to look at regulation where it is needlessly holding back the investment to take our country forward. 

‘Where it is stopping us building the homes, the data centres, warehouses, grid connectors, roads, trainlines, you name it then mark my words – we will get rid of it.

 ‘We will rip out the bureaucracy that blocks investment and we will make sure that every regulator in this country take growth as seriously as this room does.’ 

But businesses are nervous about major reforms to workers’ rights, which will grant staff access to sick pay, maternity and paternity pay and legal protection from unfair dismissal as soon as they start a job.

One industry source said last night that it was ‘ridiculous for the PM to make grand claims about cutting red tape for investors while piling on bureaucracy for each and every possible job’. 

‘You can’t help but feel the Prime Minister prefers important sounding parties to important in reality policy. Business makes decisions based on the business case, not bad sales pitches from politicians playing CEO.’

The boss of Lloyds banking group warned Labour not to impose pain on pensions and investments in the Budget.

Charlie Nunn was asked on BBC One’s Sunday With Laura Kuenssberg yesterday if he would be worried about tighter rules on pensions, or reducing the amount people can put into their pot.

He replied: ‘Yes, I think…pensions, and contributions to pensions, is critical.

‘We see about 40 per cent of people in the UK have a pension which won’t give them even a basic living allowance… so we need to increase enrolment and investments in pensions.’

It comes as new figures show employers have slammed the brakes on hiring amid fears over Labour‘s tax hikes and workers’ rights plans. 

The British Chambers of Commerce (BCC) said just 56 per cent of firms had tried to recruit new workers in the past three months. 

That was the lowest level since the second quarter of 2021 when Britain was still mired in Covid restrictions. Jane Gratton, deputy director of public policy at the BCC, said: ‘There’s considerable uncertainty for business right now. 

They are concerned about potential tax rises heading their way in the Budget. They’re also worried that changes to employment rights might increase costs and complexity. 

‘The Government needs to drive growth and ensure there’s no drop in momentum. The upcoming budget is a golden opportunity to give firms reason to be optimistic.’

In a round of interviews this morning, Science Secretary Peter Kyle said he stands ‘absolutely ready to engage’ with Elon Musk amid suggestions the tycoon had been snubbed from an invite

 The poll of more than 5,100 firms is the latest to show Labour’s threat to increase taxes in the Budget is putting the dampeners on jobs and investment, while the introduction of a raft of new workers’ rights is also making them hesitant about hiring. 

Meanwhile, a separate survey by Deloitte of finance directors at top UK companies showed a bounce in business confidence following the election had ebbed away – with geopolitical worries including the possibility of a US downturn being the biggest concern. 

And a ‘business barometer’ published by Lloyds Bank showed confidence had reached a nine-year high this year – but started to slip last month thanks to a ‘fall in economic optimism’