John Caudwell and Lord Stuart Rose join campaign against UK ‘tax creep’

A letter signed by high-profile business leaders has been sent to the government urging it to stop rolling out new tax hikes on founders

Billionaire political donor John Caudwell and retail heavyweight Lord Stuart Rose have spoken out against the “creep of taxes” affecting businesses up and down the country.

The two prominent business figures have thrown their weight behind a campaign spearheaded by entrepreneur group Helm, urging the government to “stop the creep of taxes on wealth creators”.

A letter, co-signed by Pimlico Plumbers’ former chief Charlie Mullins and Gail’s Bakery chairman Luke Johnson, calls on Labour to halt the rollout of fresh tax burdens on founders, encompassing levies on dividends, capital gains and business assets.

Lord Rose, the former chairman of both Asda and Marks & Spencer, declared he had “never been more concerned about the cost of doing business”, warning that taxation and regulation had become “serious impediments to growth and employment”.

“Employers’ National Insurance alone took £100m a year out of one supermarket,” Rose said, referring to the impact of former Chancellor Rachel Reeves’ £25bn tax hike in late 2024, as reported by City AM.

“Multiply that across the economy and it is easy to see why investment has stalled.”

Birmingham-born John Caudwell separately told the Telegraph he did not believe Labour were “electable” despite having previously donated to the party ahead of the last general election.

The open letter arrives in the run-up to John Healey’s Budget on 28 October. The new Chancellor has pledged to give businesses “breathing space” following the private sector bearing a considerable burden of the tax increases introduced under Reeves.

The letter concludes that a “steady creep of tax rises and reductions in entrepreneurial reliefs is making it harder to build and scale a business in the UK”.

Economists are sounding the alarm over the structure of the tax system and the shifts that have occurred over the past century.

One Westminster think tank has argued that the tax system has become increasingly detrimental to growth over the past 15 years.

The Institute of Economic Affairs (IEA) has warned that the overall system has deteriorated over the last 15 years, to the point where incentives for investment have been “eroded”.

Tom Clougherty, former chief of the right-leaning think tank, said that raising taxes on investment twice during periods of economic crisis was a “major error, and likely had a chilling effect on growth”.

Research indicates that levies on investment – via corporation tax, personal taxes on dividends and capital gains tax changes – have risen by 10 percentage points since the Great Financial Crisis of 2008.

The new report apportions blame to successive Tory and Labour governments for targeting investors and workers over less productive sectors of the economy. Since 2024, the Labour government has cumulatively raised approximately £65bn in taxes, with more than half directly affecting businesses.

“The tax system didn’t cause Britain’s growth slowdown, but it has made bouncing back much harder than it needed to be,” Clougherty said. “Looking back, it seems extraordinary that we have twice responded to major economic crises by sharply raising taxes on investment – but that’s what happened.

“My fear is that on current trends the 2020s and 2030s are going to be much worse in this respect than the 2010s. The tax system is probably a greater threat to enterprise and initiative today than at any point in the last 35 years.”

The IEA paper highlights research by accountancy body ICAEW indicating that the HMRC handbook has more than tripled in size, ballooning from 7,250 pages to approximately 23,500 pages.

Clougherty further contended that the UK would rank higher than its current position of 32 out of 38 on the Tax Foundation’s International Tax Competitiveness Index, had levies on personal income remained at pre-financial crisis levels.

According to the IEA’s findings, the burden on personal income has swelled from 44.5 per cent of government revenue in 2000 to 51 per cent of receipts some 24 years on.

Clougherty noted that the number of people paying the additional rate of tax, roughly 5.5m more since 2000, has represented a “striking change” in the UK economy.

The withdrawal of the personal allowance for those earning in excess of £100,000 now affects 500,000 more people than when it was first introduced.