Next year will be a "make or break" year for the relationship between ministers and business, the CBI will hear today.

Making his New Year address, chairman Digby Jones will attack tax rises and new regulation introduced by the government in 2002.

"What we saw was the continuing erosion of our competitive position," he will say.

"Business has worked constructively on issues ranging from public services to minimum standards at work.

"But now ministers must decide whether their long-term objective is indeed a low-tax and flexible economy."

The Mirror reports that more businesses are folding than at any time since the early 1990s with liquidations rising this year by 7.2 per cent.