BT boss attacks ‘government-inflicted costs’

Allison Kirkby says British businesses pay ‘10 times the amount our peers pay’ - Pau Barrena/Bloomberg

The chief executive of BT has attacked “government-inflicted costs” for holding back British businesses.

Allison Kirkby said the telecoms giant was lagging behind its European rivals because of punishing costs heaped on the group by the Labour Government.

She said taxes, levies and red tape meant its spending bill was significantly higher than other companies on the continent.

“We pay in business rates, energy levies and other costs associated with regulation and compliance 10 times the amount our peers pay in countries like Germany and the Netherlands,” she told industry conference Connected Britain on Wednesday.

Ms Kirkby, who was appointed chief executive last year, added that BT was “already at peak government-inflicted costs”.

BT previously admitted the 2024 Budget had cost the company an additional £100m, largely because of an increase in employer National Insurance contributions.

Alongside the rise in labour costs, telecoms companies are also grappling with the UK’s high electricity costs.

British companies pay the highest electricity prices of anywhere in the developed world, according to government figures.

Electricity in the UK is now about 50pc more expensive than in Germany or France and four times more expensive than in the US.

Ms Kirkby said Rachel Reeves’s Budget on November 26 could be “very difficult” for the Chancellor.

Economists have said Ms Reeves must fill an estimated £20bn shortfall in the public finances to rescue her fiscal plans.

Ms Kirkby, who is a government adviser on trade, called for greater fiscal stability and said the UK is “a sluggish, high inflation market at the moment and we absolutely, as a country, need to get back to growth”.

Business lobby groups and companies have warned the Chancellor to avoid raising taxes on businesses in the upcoming Budget, amid a mounting business backlash against the Government over anti-growth policies.

On Wednesday, oil and gas producer EnQuest accused Ed Miliband, the Energy Secretary, of creating a “self-inflicted wound” if he allowed the decline of the North Sea to accelerate.

Amjad Bseisu, the company’s chief executive, said there had been a 90pc reduction in investment in the North Sea basin over the last decade to about £2bn last year – forcing Britain to go from being a gas exporter to importing half its stocks of the fossil fuel.

The Energy Secretary is poised to reverse Labour’s ban on new oil and gas drilling amid warnings from union bosses that net zero risks crushing British industry.

Mr Bseisu suggested the Chancellor could also help address the gaping hole in the public finances by cutting windfall taxes on the oil and gas sector.

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He urged the Chancellor to make a “dramatic change” to the energy profits levy, which imposes a 78pc tax on North Sea profits.

“Even 10 years ago the revenue base was about £14bn which was significantly higher than it is today. The key is growth. The key is having a fiscal regime that actually fosters growth,” he said.

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