Rachel Reeves faces a frosty reception at the CBI summit

At the beginning of the year, Rachel Reeves was being praised all round for her efforts repairing relations between the Labour party and business. In February, the Chancellor hosted a business conference – attended by leading figures – where she pledged to cap the headline rate of corporation tax at its current rate of 25 per cent if Labour entered government. Since her party’s election triumph, Reeves has stuck to her word on that promise – although other announcements from the Chancellor have caught the business community by surprise and led to strain.

It means that Reeves will face a frosty reception when she appears at the Confederation of British Industry (CBI) conference today. The No. 10 grid plan for the week is the employment white paper – which will set out plans to reduce the number of Britons on benefits and get people back into work. Yet in a case of bad timing, Reeves must first hear from business leaders on why they believe her tax-raising Budget will reduce their ability to employ workers in this country.

CBI CEO Rain Newton-Smith will say that ‘margins are being squeezed and profits are being hit’ and when you ‘hit profits, you hit competitiveness, you hit investment, you hit growth’.