Do not put up taxes - that was the message from the CBI's president to Chancellor Rishi Sunak as he met businesses recovering from the impacts of the pandemic.

Lord Karan Bilimoria, founder of Cobra Beer and chancellor of the University of Birmingham, said businesses needed certainty to help them through the UK's "very fragile recovery".

And he said universities would be at the heart of the economic recovery in the Midlands.

Businesses are facing labour shortages, tax rises and potential interest rate rises - as well as the ongoing impact of the pandemic.

And ahead of the Autumn Budget on Wednesday, Lord Bilimoria said any new tax burdens on businesses could stifle progress they had been able to make despite tough conditions.

He told BusinessLive: "We have been saying, going back to the Budget in March, do not put up taxes - because not only have businesses suffered so much for so long but it will stifle the recovery.

"And so we've had corporation tax announced to be going up from 19 per cent to 25 per cent in 2023. We've had the freezing of the threshold which in itself is a tax increase.

"We now have the announcement of National Insurance, going up by 1.25 per cent. We've had the announcement of the dividend tax that is increasing. So our tax rate now, our tax burden, is the highest in 70 years.

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"This is no time to have the highest tax rates, this is the time to have tax rates that would incentivise growth and investment.

"On the other hand, the 130 per cent super deduction to encourage investment is just the right sort of thing the Government should be doing.

"We need much more of that and that is meant to be taken away at the same time the corporation taxes rise in 2023.

"We need not only that to continue but more of those sorts of incentives to incentivise businesses to invest because it's the investment that's required. The Government says it wants a high-wage economy.

"We all want a high-wage economy but if you want a high-wage economy, a high-build economy, a high-investment economy and a high-productivity economy, you can only have a high-wage economy if you do all those other things.

"And that is what we've got to focus on - skills, investment, productivity, and that will then lead to a high wage economy. This is a time where the Government has got to be focusing on growth.

"That growth will generate the jobs and those jobs will generate the taxes and those taxes will pay down the debt."

Lord Bilimoria's own company Cobra Beer suffered during the UK's lockdowns.

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He said: "We supply 7,000 restaurants and they were shut for more than half the time during the pandemic. We survived because of our supermarket sales. That's what kept us going but the restaurants themselves suffered hugely."

The Confederation of British Industry president said he and the business group had been warning for some time about the labour shortages faced by businesses.

He said: "In May, I was chairing the B7 summit before the G7 and I remember so clearly Dr Gita Gopinath, the chief economist of the IMF, in her address said that we would have a very strong V shaped recovery - because we were a country with a £400 billion investment of support to our economy and also our strong vaccination programme and as a result we would have a very strong bounce back after the pandemic.

"Well, the reality is, although there is growth, it now turned out to be a very fragile recovery. The focus for many companies has been from growing to coping and we predicted the labour shortages.

"I spoke in Parliament, as a crossbench peer in June, warning them about labour shortages including lorry drivers. In June, I made a speech at the Recruitment and Employment Confederation and I specifically mentioned not only lorry drivers, but also the shortage of butchers.

"And we've had shortages in every sector, whether it's the agricultural sector or hospitality sector, the financial service sector - every sector is now experiencing labour shortages.

"Every sector is now experiencing inflation and inflation at very high rates and seven out of ten of our firms, in the surveys we continually do for members, are planning to put up wages."

Lord Bilimoria said business leaders were worried that inflation may not be as short-term as first thought and that interest rates could even rise before Christmas.

He added: "And then we have the fuel and the energy crisis. There are so many, many issues that they have to deal with, let alone 18 months of a nightmare that we've all had to go through."

Lord Bilimoria was in Birmingham to meet Midlands CBI members - and said he was "very happy" to be back doing real-world meetings.

He said: "I'm just over halfway through my presidency of the CBI and, of course, half my tenure has been in the virtual world.

"This was the first opportunity that I've had to come and meet my CBI Midlands members in face-to-face events."

As well as his connections with the Midlands through the University of Birmingham - where his grandfather and mother were students - Lord Bilimoria has strong business links with the wider region as Cobra Beer is brewed in Burton.

He said he and the CBI wanted to see the Government's levelling up rhetoric become reality.

He added: "The term levelling up is very much about prosperity throughout the United Kingdom. It is not prosperity, at the expense of London, or the expense of Oxford, or the expense of Cambridge.

"The more London prospers, the better it is for the whole country but it's everyone else around the whole country also prospering.

"That's what levelling up is all about - every region of the United Kingdom, including the West Midlands, including the Midlands."

Lord Bilimoria said the CBI had launched an economic strategy called Seize the Moment which identifies £700 billion worth of opportunity in the next decade for the UK economy in areas from global trade to climate science, innovation, health and levelling up.

He said: "When it comes to levelling up, we believe clusters are very important and the West Midlands is a great example of clusters based around universities.

"There are so many, many universities - like the University of Birmingham, Aston University and many universities in the East Midlands. The universities are at the heart of the cluster with businesses around.

"The best example we have in the UK historically is Cambridge, which has a tech cluster around it and now a life sciences cluster.

"So the power of clusters around the country, including in the Midlands is huge and we need to unleash that.

"The CBI is carrying out work where we want to have a template of how to develop clusters around the United Kingdom, including in the middle of Britain."