The UK government have been told  they must get this week’s budget right or risk stumbling into a stop-start economy.

The warning came from CBI CEO Rain Newton-Smith (above) in a speech at the organisation’s Annual Conference, today.

In her speech Newton-Smith will underline the huge scale of opportunities for the UK economy and will acknowledge the many positive announcements from ministers since taking office – including the Industrial Strategy, the Trade Strategy and Infrastructure Strategy. But she is due to warn that businesses are concerned that if the wrong choices are made in the Budget, “we risk getting locked in a stop-start economy.”

In her speech to hundreds of business leaders representing companies of all sizes and sectors of the economy at the QEII centre in London, she will  urge the government to make hard choices for growth now and “work with business to fix what’s broken.”

Newton-Smith will press for bold action on both energy costs and the Employment Rights Bill, where she warns “lasting reform takes partnership – not a closed door.”  To ensure a solution that works for working people and for growth, Newton Smith will call on the government to “change course” and “ask business and unions to forge consensus through compromise.”

Setting a challenge to government, Newton-Smith will say: “If growth is your priority, prove it – make hard choices for it. Against opposition, against short-term politics. Be it welfare, be it pensions increases – show the markets you mean business. All short-term politics leads to is long-term decline… and this country cannot afford another decade of stagnation.

“That means making hard choices for growth now – before they get harder.  Having the courage to take two tough decisions rather than twenty easier ones. Raising the headroom to make promises stick. It means one or two broad tax rises, rather than death by a thousand taxes. Twenty bad choices don’t make a good system.  It means stop being defined by the past – own the challenges of today.”

She will argue many firms are concerned this year’s Budget will be a repeat of 2024, “Right now, we have a government who say they want growth,” Newton-Smith will add. “Well business wants growth too. And the truth is – only business can deliver it. But to do that, we need one thing from this government and we need it now… stability.

“If growth is our destination… stability is the only road to get there. But at this moment, ahead of the Budget on Wednesday, it feels, for too many of you, like we are off-track.

“A year on from a Budget that turned to business to plug a hole, loading on £24 billion per year in extra costs. Pushing the tax burden to a 25-year high, with two-thirds of those taxes hitting business before you’ve even made a profit.

“One year later, here we are again. A new fiscal gap, billions of pounds wide. More rumours, more U-turns, raising uncertainty. Business holding its breath again. Investment paused, projects on hold again. It feels less like we’re on the move. And more like we’re stuck in Groundhog Day.”

Newton-Smith will say the UK economy stands at a critical juncture, “We face a fork in the road. Where our biggest fear is, if we get the wrong choices on Wednesday… More short-term tinkering; More bold choices not made; More politics over growth… then we risk getting locked in a stop-start economy.

“Where large tax rises rear their head every year or even every Autumn and Spring. That is not the road to growth. That is a cycle of doubt and uncertainty. That is the road – to decline.”

Newton-Smith will add: “I genuinely believe this government wants growth… In their first year and a half they tackled some of the biggest obstacles… deep problems in our economy left untouched for too long.

“Transforming our broken planning system… they’ve pledged to take a strimmer to red tape…set out a corporate tax roadmap for global competitiveness. They’ve protected an extra £100bn in capital spending this parliament – vital for our long-term growth. That is brave and bold…

“This government has launched the most ambitious Industrial Strategy in years, shaped through hundreds of meetings with the CBI, with many of you in this room. We’ve seen the first Trade Strategy since Brexit. The first serious Infrastructure Strategy in over a decade. These are clear, ambitious plans. But here’s the thing – so far, so many of them are just that, plans. Strategies may point the way – but they don’t pour concrete.”

She will call on the government to fix what’s broken, “Our message is simple: if this government truly wants the road to growth, work with business to fix what’s broken – at this Budget and beyond. Pick up the policies that have sat in the “too difficult” box too long. Forge a tax system that rewards investment. A rates system that encourages growth. Get the planners now, so projects can get built. Get the economy moving… Deliver, deliver, deliver on the promises you’ve made. Business can help – with real partnership between public and private.”

Newton-Smith will conclude, “Tough choices only matter if they move us forward. When you take people down a hard road, you must show them where it leads. Not just management, but leadership and vision. Because confidence comes from stability – but also from hope. The courage to imagine the destination. A UK growing with confidence again – led by business.”

“Where planning decisions take weeks, not years. Where business give young people their start, and older workers their next chapter. Where firms choose to invest, manufacture and list here. Where we don’t just promise critical infrastructure: we build it – better trains, better hospitals, homes and communities. Where families live longer, healthier, happier lives – in a country not falling behind, but leading again. That is the road to growth… Not broken Britain – but a country moving forward to a better future.”