Companies facing misery have lost all love for Labour

BUSINESS leaders have given a big thumbs down to the new Labour government.

- Tim Newark

Confidence has fallen from a three-year high in July of +7, to a low of -12 last month, according to a new survey. Bosses fear tax hikes in the autumn Budget will hammer profits, while new Labour legislation will discourage them from hiring staff.

Labour claims public finances are in their worst state since the Second World War and they're going to have to raise taxes to fill the supposed £22billion black hole left by the Tories.

With a scenario like that, why would any entrepreneur invest in Britain? And Keir Starmer's claim that it's going to get worse before it gets better isn't exactly inspiring confidence, either.

A recent report by the Institute of Directors, representing 20,000 business leaders nationwide, reflects that collapse in confidence thanks to a "news-flow in recent weeks on employment rights and autumn tax rises", according to its chief economist, Anna Leach.

Faced with legislation to give workers greater rights to flexible working and to strengthen trade union power, many businesses are holding back plans to take on new staff. Proposals to increase employers' contributions to national insurance as well as hikes in capital gains taxes are also hobbling firms.