In a strongly-worded statement to chancellor Gordon Brown entitled 'Protecting the UK's competitive position,' the CBI claims tax rises would cost UK business £47bn by 2005.

The business lobby group also called on ministers to halt the 'relentless and damaging' rise in taxes to business, saying they must draw a line on the tax hikes.

According to the CBI most of the burden comes from the one percent increase in National Insurance contributions which alone will cost business £8bn by 2005.

CBI director general Digby Jones admitted business had a role in helping the government improve public services. But he said: 'Ministers cannot keep siphoning off company funds without damaging investment productivity and competitiveness.'