The chief executive of JCB has warned Rachel Reeves that she ‘can’t tax her way to growth’ as the economy flounders ahead of the Budget.
In just the latest broadside from corporate Britain, Graeme Macdonald said the last Budget was ‘very bad for business’ and urged the Chancellor not to do anything ‘daft’ next month.
He also revealed the Staffordshire-based digger-maker is ramping up investment in the United States to avoid paying tariffs on imports to Donald Trump’s America.
‘We probably will end up making everything in America that we sell in America rather than importing anything,’ said Macdonald.
The comments add to the chorus of condemnation from British business over Labour’s handling of the economy ahead of the Budget on November 26.
Marks & Spencer boss Stuart Machin this week urged the Chancellor to ‘change course’ to escape an ‘economic doom loop of ever higher taxes and lower growth’.
Heavy machinery at JCB’s Rocester headquarters in Staffordshire
Blasting the ‘catastrophic’ £25billion increase last year in National Insurance paid by employers, he called on the Government to ‘spend less, borrow less, tax less, regulate less, reduce inflation and enable growth’.
Despite the pleas from business, Reeves looks set to unleash another £20billion to £30billion of tax hikes in the Budget to fund her lavish spending plans.
In an interview with the BBC yesterday, Macdonald cautioned the Chancellor against such a move, saying: ‘We want to make sure that we can still compete in a global marketplace and be competitive in the UK.
‘The Government should really listen to that. Just increasing tax rates is not a good thing on business or individuals.’
He added: ‘Encouraging businesses to invest, create jobs, grow and make the UK a good place to do business – that’s what the principle should be of any Budget.’
JCB, which employs 13,000 people across the world, is also grappling with Trump’s tariffs after being hit with a 25 per cent tax on UK steel imports in August, on top of the 10 per cent levy already imposed on goods going into the US.
But in describing the company as a ‘poster child’ for Trump’s America,
Macdonald added: ‘The Trump administration is trying to bring back manufacturing jobs, high-quality, high-skilled, high-paid jobs.
‘We’re doing exactly what the Trump Administration wants – we’re investing in America.’
The company plans to create 2,000 jobs at its operations in San Antonio in Texas in the coming years.
But the heavy machinery manufacturer, which has more than 750 dealers worldwide, insisted it has a ‘long-term commitment to British industry’.
It followed the company’s announcement of a £100million investment in its Staffordshire headquarters this week to coincide with its 80th birthday.
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