McVitie’s boss: We’re losing taste for investing in Britain

Britain has become a less attractive place to do business, the chief executive of the company behind brands including McVitie’s and Jacob’s has said.
Speaking at the CBI’s annual conference in London today, Salman Amin, the head of Pladis, said his view of the UK’s investment appeal had worsened.
“Historically we’ve been super bullish on the United Kingdom. In fact, by far, the greatest investment across all of our countries over the last decade or so has come to the UK … so we’ve been a very major investor in the UK.” However, he added: “We would like to continue to be a major investor going forward. It’s becoming harder to understand what the case for investment is.”
Amin became the latest business leader to add to a chorus of concerns over the effect of the budget on Britain’s economy.
Tax increases in the budget have made it harder for businesses to “take a chance” on hiring people, the head of the CBI said as the government prepares to announce big welfare reforms that aim to “get Britain working”.
Rain Newton-Smith said that measures announced by Rachel Reeves last month are undermining the government’s mission to get people back into jobs.
Reeves will defend her tax rises, telling the CBI there are “no alternatives” that would boost spending on the NHS.
A CBI survey suggests that half of employers are looking to cut jobs since the £25 billion increase in their national insurance contributions was announced. The poll of 266 companies also suggests nearly two thirds are now reconsidering recruitment plans.
In a speech to the CBI conference, Newton-Smith said that business will be key to getting the nine million working-age people who are out of the labour force back into work. “Getting them back in and raising productivity are mission-critical not only for growth, but for the well­being, the life opportunities of those people,” she said. “Business is absolutely essential for that, but the budget just made it harder for firms to take a chance on people.”
Her warning suggests that the government faces an uphill challenge to “get Britain working”. It will announce its reforms on Tuesday and will promise the biggest overhaul of employment support in a generation.
Newton-Smith said: “What really defines growth is the decisions made in boardrooms up and down the country. It’s CFOs (chief financial officers) asking, ‘can we afford to invest? Can we afford to expand? Can we afford to take a chance on new people?’ Well, after the budget, the answer we’re hearing from so many firms is still ‘not yet’.
“The rise in national insurance, the stark lowering of the threshold, caught us all off guard. Along with the expansion and the rise of the national living wage — which everyone wants to accommodate — and the potential cost of the Employment Rights Bill, they put a heavy burden on business.”
Liz Kendall, the work and pensions secretary, confirmed reports by The Times last week that people aged 18-21 would lose their benefits if they refused work and training opportunities.
A new youth guarantee will ensure that every youngster has the opportunity to engage with skills or employment programmes but she said that they would “have a responsibility to take them up”. She told Sky News: “If people repeatedly refuse to take up the training or work responsibilities, there will be sanctions on their benefits.”
Labour has pledged to reduce the welfare bill by £3 billion over five years through the package of reforms. Jobcentres will be transformed from a one-size-fits-all benefits administration service into a public employment service available to anyone to help them into work and progress in their careers.
Kendall said the benefit system was too focused on unemployment and said her reforms would refocus employment support to recognise that many people’s physical and mental health conditions fluctuated.
Her white paper is expected to include the placement of work coaches in mental health clinics and access to employment advisers will be expanded to those with bone, muscle and joint pain.
However, the reforms risk being overshadowed by the continuing fallout from the tax-raising budget last month.
The warnings are reflected in the CBI’s second post-budget survey, in which 48.1 per cent of respondents said they would react to the employers’ national insurance rise by “reducing current headcount”, and 62.4 per cent said they would reduce the number of recruits and 46.2 per cent would delay or temporarily reduce pay rises.
Newton-Smith said that “tax rises like this must never again simply be done to business” and that profit is not a “bad thing” or a “dirty word” but a source of investment and that “margins are being squeezed and profits are being hit”.
Business concerns have centred on the “heavy burden” of a £25 billion rise in employer national insurance contributions, on top of a higher minimum wage and planned employment reforms, as well as changes to inheritance tax and business property relief.
More than 80 retail bosses, including those at Tesco, Sainsbury’s and John Lewis, warned the chancellor last week of industry store closures and price rises in response to the budget.
Thousands of farmers also protested in Westminster over the reforms to inheritance tax.
Reeves is due to tell the CBI: “I have heard lots of responses to the government’s first budget but I have heard no alternatives.
“We have asked businesses and the wealthiest to contribute more. I know those choices will have an impact. But I stand by those choices as the right choices for our country: investment to fix the NHS and rebuild Britain, while ensuring working people don’t face higher taxes in their payslips.”
She will add: “I do not plan to have another budget like this. I have wiped the slate clean.”
Jess Phillips, a Home Office minister, defended Labour’s reforms, saying that “difficult decisions have to be made”. She added that failing to raise taxes to fund the NHS “would have made our … country sicker” and said it was too soon to claim jobs would be lost. “We will have to wait and see,” Phillips told Sky News.
A government spokeswoman said: “Last month we delivered a once-in-a-parliament budget to wipe the slate clean and deliver change by investing to repair the NHS and rebuild Britain, while ensuring working people don’t face higher taxes in their payslips.”