CUT business taxes, reduce workers’ rights and take an axe to welfare, Tony Blair told the government today.

Mr Blair’s prescription, delivered via a report from his billionaire-funded Tony Blair Institute (TBI) aimed to pile pressure on Chancellor Rachel Reeves to shift still further rightwards in her Budget this month.

The former Labour premier’s main target was the rights set out in the government’s already diluted employment rights Bill.

The TBI is joining bosses’ lobby groups in demanding that day-one rights for employees be scrapped. 

Calling the plan “extreme” it claims it would weaken the economy by “eroding business confidence to hire and ultimately undermining growth.”

Mr Blair favours a six-month qualifying period for employment rights, in line with Tory amendments to the Bill currently winding its way through Parliament.

The TBI is also urging big cuts to welfare, including Personal Independence Payments, despite Prime Minister Sir Keir Starmer’s failure to push this change through Parliament in the summer, thanks to a Labour backbench revolt.

Savings would be used to fund tax cuts for business investment, the TBI urges. The institute also told Ms Reeves that if she increases VAT or income tax – either would be a breach of Labour’s manifesto – she should aim to reverse the rises before the next election.

The Chancellor is widely believed to be considering such tax increases in order to keep within her cardinal fiscal rules and reassure the bond market.

The bosses’ organisation, the CBI, also urged welfare cuts and a possible end to the pensions triple-lock. 

Director-general Rain Newton-Smith demanded Ms Reeves “take tough decisions now or risk a downward spiral that sees us robbing Peter to pay Paul just to fund normal government expenditure and puts our growth prospects in peril.”